The El Sol Property

The El Sol Property (former Kesaka deposit) is located approximately 100 km east of Red Lake. 312 Mt (Non NI 43-101) to a vertical depth of 305 m averaging 31.1% Fe of mineral resource estimate.

Location

The El Sol Property is located approximately 100 km east of Red Lake, Ontario and 68 km northeast of Ear Falls, Ontario in the Red Lake mining division, district of Kenora, Ontario. The El Sol Property comprises 4 unpatented contiguous mineral claims for a total of 1024 Ha.

el sol property iron map

Access

The El Sol Property is accessed via the Wenasaga logging road off Highway 105 immediately north of Ear Falls, Ontario. At kilometre 70 on the Wenasaga road, a spur logging road heads off to the east. At the end of this road, approximately 2.8 km from the Wenasaga road junction, an ATV trail extends an additional 2.7 km to the north boundary of the claims. Travel time by road from Ear Falls to the start of the ATV trail is approximately one hour.

The El Sol Property can also be accessed by float plane out of Ear Falls. Kesaka Lake on the west side of the El Sol Property is very shallow, but a small plane such as a Cessna can land there. Jean Lake or Crossman Lake, on the east side of the El Sol Property, is deeper and is suitable for larger float planes. During the 2008 exploration program, supplies were transported by truck to a staging area 4 km to the north of the El Sol Property and then were slung in by helicopter to camp as required.

Property Description and Ownership

The El Sol Property is comprised of four staked mining claims covering a total of approximately 1,024 hectares. A claim is a mineral right that gives its holder the exclusive right to explore a designated territory for any mineral substance that is part of the public domain, except for loose superficial deposits of gravel, sand and clay. A claim does not bestow any surface rights and Northern Iron does not own any surface rights.

The El Sol Property has not been legally surveyed. The table below provides details of the current land holdings.

Northern Iron is the registered owner of the claims listed in the MNDM claims database. To maintain a claim in good standing, approved exploration work of a certain required dollar value must be completed and filed with the MNDM. As prescribed by the Mining Act (Ontario) and regulations made thereto, work to a value of $400 per year is required per claim unit except for the first year, when no assessment work is required. Assessment work must be performed and applied to each of the mining claims until the holder applies for a mining lease.

Three of the claims comprising the El Sol Property were staked in May 2005. The fourth claim was staked in October 2008. Assessment work was filed for the initial three claims in 2007 and 2008. The 2007 work consisted of stripping and sampling of an old trench area. The 2008 filing was for the initial components of the exploration program conducted by Raytec and covered linecutting and geophysics. The MNDM claims information database reports that assessment work was filed for all four claims on June 2010, maintaining the El Sol Property in good standing.

Property Agreements

On November 21, 2007, Raytec (the predecessor to LEC) entered into an option agreement with Skyridge Consulting Inc., Jason Gigliotti, Negar Towfigh, Minegate Resources Capital Group Inc. and 1544230 Ontario Inc. to acquire a 100% interest in claim numbers KRL3019665, KRL3019666 and KRL3019667, subject to a 2% NSR royalty. Claim number KRL 4241201 was staked subsequent to the Option Agreement, but became part of the El Sol Property, as it was within the original area of mutual interest as defined in the Option Agreement.

On February 17, 2010, LEC entered into an assignment agreement, as subsequently amended, with Northern Iron that transferred and assigned its option and obligations in the El Sol Property, including the 2% NSR royalty, to Northern Iron in exchange for 8,500,000 million Common Shares. Pursuant to the Assignment Agreement, the vendors of the El Sol Property under the original Option Agreement with Northern Iron agreed to waive all cash payments, share issuances and exploration expenditures owing to them from LEC under the Option Agreement in consideration of 500,000 Common Shares.
The transfers were approved by the MNDM on January 12, 2011.

Permitting

No permits were required for Northern Iron's exploration programs, but Northern Iron has to adhere to guidelines established by the Ministry of the Environment for working near water and on water. The camp site used for Raytec's exploration programs was permitted under a permit issued to Ackewance.

Environmental Issues

No environmental studies have been conducted on the El Sol Property. No environmental studies are required at this time.

Climate

Kenora has a moist temperate climate with cold winters. Mean daily summer temperatures at Ear Falls range from 18°C to 24°C in July. The days are warm and the nights are cool. In January and February, mean daily temperatures are approximately -23°C to -18°C.

Mean annual precipitation is 650 mm to 700 mm, including approximately 200 cm of snowfall.

The best season for exploration is from June to October, with optimal months being June and September. Exploration is often curtailed from November to May due to deep snow cover, although some activities, such as diamond drilling and geophysical exploration carried out over swampy areas or lakes may best be undertaken in the winter months, when freeze-up makes these areas more accessible.

Physiography

The El Sol Property is situated between two major drainage systems with the Wenesaga River to the north, and the Papaonga River to the south. Throughout the area, the maximum topographic relief is 100 m with normal variations of less than 30 m.

The El Sol Property is centered on an east-west trending creek with flanking bog areas between Kesaka Lake and Jean Lake. The central and southern part of the El Sol Property area is dominated by marsh and spruce bog with very limited outcrop. Terrain to the west and north, are higher and characterized by a series of isolated outcrops, subcrops and broad deposits of coarse glacial debris. Outside of the central marsh, the El Sol Property is treed. Trees are mostly spruce, poplar and aspen, with low lying shrubs and moss cover. A dense stand of immature spruce is dominant in the western area of the El Sol Property.

Drillhole records indicate that overburden varies from 1 m to 3 m deep in the northern part of the area, and from 3 m to 10 m deep in the southern part. Overburden type is variable from organically derived muskeg and peat deposits to glacial and lacustrine clay, sand and gravel deposits and local metre-scale erratics. To the northeast of Kesaka Lake, a series of transverse glacial moraines trend north-westerly into a logged area off the Mascooch Road.

Local Resources and Infrastructure

The El Sol Property is located 68 km northeast and 100 km respectively east of the towns of Ear Falls and Red Lake. Red Lake is the home of Goldcorp Inc.'s Red Lake Gold Mine. Red Lake has a population of approximately 5,000.

Ear Falls was founded as the site for a water dam, part of a hydroelectric development which would regulate the discharge of waters from Lac Seul into the English River. A powerhouse was added in 1929 and soon power was being generated for the mining operations to the north at Red Lake. Additional generating units were installed in 1937, 1940 and 1948, respectively, providing a steady flow of electricity to the northwestern power grid.

Ear Falls was also the staging point for the Griffith Mine located at Bruce Lake, Ontario, 20 km north of Ear Falls. The Griffith Mine was in production from 1968 until 1986. Approximately 22.85 million t of pellets grading 66.7% Fe were produced. The pellets were transported by train to Thunder Bay, Ontario and then shipped on the Great Lakes to Stelco's steel making facilities in Hamilton, Ontario and Nanticoke, Ontario on the shore of Lake Erie. The MNDM states that the mine site contains a "reserve" of 120 million t of mineralization at an average grade of 29% Fe. All equipment has been removed and the site rehabilitated to provide an area for recreational activities.

History

In 1955, a large scale airborne geophysical survey was completed. This survey defined several magnetic anomalies and claims were staked, but then sold to various interested parties. The claims covering the El Sol Property, amongst others, were sold to Tex-Sol Exploration Limited and/or El Sol Gold Mine Ltd. understood to be associated companies.

In 1956, El Sol Gold Mine Ltd. initiated exploration on its properties by contracting Geo-Technical Development Company Limited to complete geological mapping and a ground magnetometer (dip needle survey) of the El Sol Property to follow-up the airborne survey results. This survey delineated the main zones of iron formation on the El Sol Property within an east-west trending corridor straddling the Kesaka Lake and the Crossley (Jean) Lake. The most extensive anomalies were named the A and B zones and the zones of lesser extent were named zones C to I. Small surface exposures of the A zone iron formation were mapped near the north-western shore of Kesaka Lake. A channel sample was cut across one of the exposures and assay results for a composited sample returned 31.74 %Fe over 8.08 m. A broad area to the west of Jean Lake across the A zone horizon was trenched and blasted. A 50 t bulk sample was extracted and stored at the western shore of Jean Lake, but there is no record of results for this sample.

el sol iron exploration

During the winter of 1956-1957, the extent of the A and B zones were tested by a total of 10,423 m of drilling in 67 holes. Most holes were drilled on 122 m spaced sections, at inclinations of -45°, and all but one hole was drilled to the north. Multiple holes were drilled along selected 61 m spaced sections. The holes were mostly 122 m to 183 m long, with two steeper inclined holes greater than 1487 m long. The vertical depth drilled was typically 76 m to 91 m.

Drill core samples were assayed by Thomas Heys and Sons of Toronto, but no description of the method is available. Metallurgical testwork was initially designed and supervised by Professor Harry U. Ross of the University of Toronto and a second program of testwork was conducted at SGS Lakefield Research. Subsequent testwork was conducted at the Lurgi in Frankfurt Main, Germany.

In 1958, H. Brodie Hicks, P.Eng., prepared a preliminary engineering study for the El Sol Property and completed a mineral resource estimate of 312 million t to a vertical depth of 305 m averaging 31.1% Fe. The foregoing historic resource estimate was completed prior to the implementation of NI 43-101, and should not be relied upon. A Qualified Person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves under NI 43-101 and Northern Iron is not treating the historical estimate as current mineral resources or mineral reserves. The specific data used to make the estimate is incomplete and/or not available, and has not been confirmed by Northern Iron. The historical estimates have not been audited or confirmed but are believed by Northern Iron to be of historical importance.

Hicks suggested a mining scenario combining open pit and underground mining methods to depths of 122 m and 305 m, respectively because he estimated the waste: ore stripping ratios would be excessive for pitting to depths greater than 122 m vertical.

R.L Segsworth completed an initial mining cost assessment in 1957. Segsworth concluded that the cut-off between open pit and underground mining would be at a vertical depth of 76 m. In addition, a transportation study was undertaken. H. Ross also investigated alternative processing options for the "ore" including direct reduction.

No significant additional work on the El Sol Property was carried out until 2007. Consolidated Faraday was the successor to El Sol. In 1989, Bowen stated in his report "Geology of the Slate Lake Area, district of Kenora (Patricia Portion)" that Consolidated Faraday and its predecessors continued to report on its iron properties in the Canadian Mines Handbook each year until 1972. Presumably, in 1972 the claims lapsed.

The three mineral claims of the El Sol Property were staked in 2005 by Mr. P. English, to cover much of the iron formation explored by previous workers. During the early winter of 2007, a brief program of outcrop stripping and trenching was conducted in two areas to the west of Kesaka Lake by Spectre, but this program failed to expose iron formation.

Raytec optioned the El Sol Property in November 2007, and in the spring of 2008 initiated a program of linecutting and ground geophysics.

Regional Geology

The El Sol Property is situated in the Archean, Lake Birch-Uchi greenstone belt of the Uchi Subprovince of the Canadian Shield. The Birch-Uchi belt is one of six principal interconnecting greenstone belts in the Uchi Subprovince. From west to east these greenstone belts are: the Bee Lake, Red Lake, Birch-Uchi, Meen-Dempster, Lake St. Joseph and Pickle Lake. The greenstone belts are underlain and surrounded by, or internally intruded by, both younger and older felsic and mafic plutons and are complexly deformed. The El Sol Property is located adjacent to the southern boundary of the Uchi Subprovince, adjacent to its boundary with the English River Subprovince. The east-west trending Sydney Lake - Lake St. Joseph Fault is the boundary between the two subprovinces. This fault zone is located 5 km south of the El Sol Property.

The Birch-Uchi greenstone belt is comprised of three volcanic assemblages: Balmer, Woman and Confederation, each the product of separate episodes of volcanism and each showing an evolution from mafic to felsic rocks. The volcanic assemblages, particularly in the eastern and south easternmost part of the Birch-Uchi belt are overlain unconformably by an extensive metasedimentary sequence dominated by turbiditic greywacke—mudstone rocks containing panels of volcanic rock. The El Sol Property is situated within this folded metasedimentary terrane on the fringes of the greenstone belt.

Metamorphic grade within the Birch-Uchi greenstone belt ranges from very low grade to medium, to high grade. High grade metamorphic rocks form an outer rim for each of the greenstone belts against external granitic terrane while the interior of each of the greenstone belts are low grade to very low metamorphic grade. An east-west trending ribbon of medium metamorphic grade follows the Sydney Lake - Lake St. Joseph Fault south of the El Sol Property, but this ribbon is in the English River Subprovince. The El Sol Property is in an area of generally low metamorphic grade between the high grade rim of the greenstone belt (to the northeast) and the Sydney Lake - Lake St. Joseph Fault.

Similar metasedimentary terrains occur with the other greenstone belts of the Uchi Subprovince. The metasedimentary sequences are characteristically tightly folded and trend east-west.

The past-producing Griffith Mine was located on Bruce Lake, 60 km west of the El Sol Property, on a mt iron formation within a metasedimentary panel at the westernmost extreme of the Birch-Uchi greenstone belt. The Bruce Lake iron occurrence is situated at the closure of a large scale east-west trending fold adjacent to, and intruded by, a granitic intrusive complex. There are a number of other occurrences of iron formation known within the metasedimentary sequence of the Birch-Uchi greenstone belt, notably at Karas Lake and at Whitemud Lake, respectively 55 km and 25 km west of the El Sol Property. The Emarton-Karas Lake occurrence is also at a fold closure.

The Eagle Island - Fish Island iron ore deposit, on the periphery of the Lake St. Joseph greenstone belt located on claims owned by Rockex Ltd. 100 km east of the El Sol Property is another example of an east-west trending tightly to isoclinally folded iron formation sequence located in a similar, and likely correlative, metasedimentary sequence.

Property Geology

The El Sol Property is underlain by a central east-west trending sequence of clastic metasediments with local horizons of iron formation, flanked to the north and south by horizons of mafic to intermediate volcanic flows, volcaniclastics and amphibolite. The clastic sediments vary from wacke to arkose and are locally intercalated with horizons of argillite and mt-dominant oxide iron formation. Local units of polymictic conglomerate have also been documented. The volcano-sedimentary successions generally trend north-eastward to eastward in the western part of the claim group and trend eastward to south-eastward in the eastern part. The rocks dip vertically to steeply south. The distribution of the iron formation within the succession outlines an east-west trending tight fold structure with its fold closure southwest of Kesaka Lake. The gross repetition of stratigraphy from pelitic to argillaceous sediments with the iron formation in the core of the structure, flanked by intermediate and mafic volcanics to both the north and south, is consistent with a property-scale synclinal fold. El Sol named the iron formation forming the north limb of the fold the A zone and the south limb the B zone.

Indicators of stratigraphic tops within mafic pillowed flows in the southern part of the El Sol Property show tops are to the south. However, the succession drilled on the A zone and B zone of the iron formation, together with observed cross bedding in sediments near the iron formation, indicates tops are to the south, along the northern limb, and to the north, along the southern limb. These observations suggest that either an additional fold axis or a thrust fault lies near the southern edge of the El Sol Property. This could account for the apparent discrepancy between the stratigraphic tops indicators. The outer part of the fold is thus considered to be the base of the sedimentary succession. Stratigraphically below the iron formation, the sequence is dominated by a coarser section of greywacke with local conglomeratic horizons. Thin, discontinuous horizons of argillite (grey to black) are concentrated near the iron formation, but are more common near the base of the iron formation. Above the iron formation, the sequence becomes finer and consists mostly of greywacke and arkose. The conglomerate consists of lens shaped clasts of mostly mafic to felsic volcanics and sediments, within a wacke matrix. Conglomeratic horizons are repeated within the succession and could be part of a series of isoclinal folds. With increasing metamorphic grade, migmatitic textures have been generated in the clastic metasediments. Such rocks have been logged as paragneiss and quartz-biotite schist, and are more common near Jean Lake and west of Kesaka Lake.

Along the southern edge of the El Sol Property, there is an east-west trending sequence of pillowed mafic volcanics which is 200 m to 300 m wide. To the immediate north of the El Sol Property, there is also a broad, 300 m wide section of mafic to ultramafic volcanics. This corridor hosts horizons of coarse grained, garnetiferous amphibolite. These rocks appear to be tuffaceous, with common alternating layers of amphibolite and feldspar-rich sandstone. Garnets up to 1 mm in size are common, and locally form bands which are highly contorted. It has been suggested that these units may have had volcanic flow and volcaniclastic members as protoliths.

Immediately south of the amphibolite and in the northern part of the El Sol Property is a 500 m thick section of intermediate volcaniclastics of tuff to tuff-breccia. Outcrop exposures of these rocks are typically light to medium grey, with 15 to 20% biotite. Primary bedding planes are discernable. Veins and fracture-fillings of albite and epidote are common.

Structure

The area has been subjected to high levels of ductile strain, resulting in regional-scale folding with strong cleavage development. Indications of strain are best preserved within bedded units such as conglomerate, argillite and iron formation. The observance of decimetre-scale refolded folds in the iron formation suggests that polyphase folding of several orders has occurred. Tight, isoclinal to asymmetrical folds and straight to attenuated bands of mt-chert indicate that the iron formation has been highly transposed. The plunge of these folds is generally steeply to the west.

Mineralization

The iron formation on the El Sol Property consists predominantly of mt taconite-type iron formation. The mainly mt iron formation in some places carries a minor amount of hematite and iron-bearing silicates. Narrow transitional facies of silicate iron formation containing minimal mt occasionally occur on the contacts of the oxide iron formation with the metasedimentary host. Mineralogical work in 1957 indicated that the silicates were mainly hornblende and actinolite with some chlorite and grunerite. Polythin section examination and liberation testwork by Lurgi and SGS Lakefield Research showed that fine grinding to 99% -325 mesh was required to achieve maximum liberation. The iron formation is generally characterized by alternating bands of mt and recrystallized chert, and chloritic mudstone which range in thickness from sub-millimetre to metre-scale. Internal variants are common with varying proportions of the above four components: from silicate and lean iron formation, to mt-chlorite and mt- jasper dominant types.

As described under "Property Geology", the iron formation on the El Sol Property is in the form of a tight, east-west and likely steeply plunging fold. The iron formation that is the north limb of this fold was designated the A zone and the south limb the B zone by El Sol in 1956. A number of smaller zones located between the A zone and B zone were also defined. These zones are named C to I. The H and I zones according to Bowen were located on the western property boundary and just north of the A zone. Bowen describes them as being extremely small. WGM is unsure where these are located and is not sure they are located on the El Sol Property or covered by Raytec's magnetic surveys.

Magnetic patterns suggest the C zone to G zone individually have strike lengths of 200 m to 300 m. They presumably are segments of the south limb, the B zone that has been partitioned and offset from the general trend by folding and faulting. In any eventual mining scenario these segments could potentially be of importance so their extent and structure will need to be better understood.

The closure of the main fold in the iron formation is immediately west of Kesaka Lake but either it is not very prominent or has been partly sheared away. The A zone and B zone at the west end of the El Sol Property are about 200 m apart. About mid-El Sol Property, the A zone and B zone are approximately 850 m apart.

The A zone was drilled by El Sol over it entire extent. All of Raytec's 2008 drillholes targeted the A zone. The zone has a strike extent of approximately 4.5 km and dips vertical to steeply south. True thickness of mineralization varies from approximately 50 m to 70 m and towards the fold closure it pinches out. In some places there are subsidiary A zones, which are generally continuous, but could be discontinuous in nature and followed as discrete orebodies.

Raytec's drillhole ES08-007 tested the main A zone and returned an average grade of 21.21% TFe over an intersection length of 80.8 m. Considerable rock coded as QP containing minimal mt, was logged within the iron formation in this drillhole. WGM believed much of this material is probably metasediments, either clastics or volcanic rather than intrusive. Drillhole ES08-008 was drilled on the same section below drillhole ES08-007. It intersected a section of oxide iron formation containing much less QP than the upper hole. The zone of mineralization averaged 32.06% TFe over an intersection length of 125.30 m.

Historic drillhole ES57-026 also tested this same zone of mineralization. The zone of mineralization is slightly displaced in this drillhole from what is indicated by the two 2008 drillholes, but the geology intersected is very similar in rock types logged and zone width. The displacement of the zone in the 1956 drillhole, relative to the 2008 drillholes, is most likely due to the present uncertainty of the collar location for the 1956 drillhole. Historic El Sol Property drill cross sections and logs report the zone of mineralization that averages 25.9% Fe over an intersection length of 79.10 m. A narrow interval of silicate iron formation was logged along the north contact of the mineralized zone in both ES57-026 and ES08-007.

The southern zone of mineralization was only tested by historic drillhole ES56-024. It shows this zone is approximately 20 m thick, true thickness. Historic assay results returned an average grade of 32.17% Fe over an intersection length of 26.76 m. WGM has reported these historic assays as %Fe because they are not completely certain whether they were total iron or partial iron, but think it is most likely that they are partial iron, or aqua regia acid soluble iron. Work by SGS Lakefield Research on historic samples commonly reports both SFe and TFe. This work shows that SFe assays for oxide iron formation material are only approximately 2% less than TFe assays. This is reasonable and as expected because the El Sol Property mineralization contains low amounts of iron-bearing silicates. Generally, therefore there should not be a lot of difference between historic El Sol drill core assay results and Raytec's assays. This zone and the main A zone are both reflected in Raytec's magnetic survey results plotted in profile along the top of the section. Magnetic survey results show that this subsidiary zone has a strike length of approximately 1 km.

el sol cross section iron

The above figure shows a cross section through the A zone 1.1 km east of the cross section described above. This cross section shows two Raytec drillholes, ES08-001 and 002 both of which cut the mineralized zone below its intersection in historic drillhole ES57-053. The mineralized zone in all three holes is fairly similar in width. The zone dips about 85o south and is 50 m to 70 m true thickness. Raytec drillhole ES08-001 returned a grade of 25.96% TFe (31.4% mt) over an intersection width of 65.5 m.    Raytec drillhole ES08-002 returned 30.53% TFe (37.2% mt) over an intersection length of 98.43 m. No individual sample assay results have been located for historic drillhole ES57-053, but a historic cross section is available that indicates the presence of a zone of mineralization averaging 28.49% Fe over an intersection length of 79.61 m. Again the mineralized zone in the historic drillhole may be slightly displaced from where it is indicated by the two 2008 drillholes.

The B zone was drilled extensively by El Sol, but not by Raytec. It is segmented into sections by a NE-SE trending fault and folding and has a total strike length of approximately 2.1 km. El Sol's historic drilling shows that its thickness diminished eastwards away from the fold closure. Drill holes ES57-027 and ES57-033 are located in the B zone immediately west of Kesaka Lake, adjacent to the main fold closure. These holes were drilled on section and indicate the mineralized zone has a true thickness at this location of approximately 85 m and it dips steeply south. Assays for both these two historic drillholes are available. In drillhole ES57-033 the zone of iron formation averaged 32.48% Fe over an intersection length of 86.14 m. Drillhole ES57-027 cut the same zone 50 m below ES57-033 and assays averaged 32.05% Fe over an intersection length of 91.87 m. Drillhole ES5-066, located 800 m east of ES57- 033/027, intersected a zone of iron formation with a true thickness of approximately 36 m. Dip of the zone is not certain but it is vertical or steep. Individual assay results have not been located but historic drill cross sections report zone of mineralization that averaged 31.08% Fe over an intersection length of 49.41 m. The lithology description from the drill log agrees with the assay average reported and the location of the intersection agrees with Raytec's magnetic survey results.

Exploration

General

Northern Iron has conducted no exploration on the El Sol Property. All recent exploration was conducted by Raytec.

Raytec's 2008 Exploration Program

Raytec, LEC's predecessor company, has completed one exploration program on the El Sol Property. This exploration program was conducted in 2008 and consisted of four main components:

  • linecutting;
  • ground magnetic survey using an Overhauser magnetic survey magnetometer;
  • ground Overhauser magnetic survey;
  • and diamond drilling.

The early parts of the 2008 program were designed and supervised by Gordon J. Allen, P.Geo. The latter phases of the program consisted of the diamond drilling. Analysis and testwork aspects relating to drillhole samples were designed, directly supervised, compiled and reported on by Ms. Janice Fingler, P.Geo.

Total exploration expenditures on the El Sol Property by Raytec between 2008 and 2010, inclusive of the drill program and exclusive of all property acquisition costs, were $1,180,616.

Linecutting

A total of 68.5 km of linecutting was completed by personnel of Ackewance. A 4.5 km long, east-west oriented baseline was centered on the El Sol Property between the two main zones of iron formation. Crosslines spaced at 100 m intervals, with stations at 25 m intervals, were cut north-south to the El Sol Property boundaries. Portions of the central grid were not completed due to time and access limitations and the lakes within the El Sol Property also were not covered.

Ground VLF-EM and Proton Precession Magnetic Survey

Dan Patrie Exploration Ltd. was contracted to conduct GPS surveying of grid stations, and ground magnetic and VLF-EM surveying along 58 km of the cut lines. The UTM coordinates of the picketed stations of the lines were collected for spatial plotting of the geophysical data. The surveys were carried out using a Scintrex Envi combined magnetometer and VLF-EM receiver. The VLF-EM survey collected readings using both the transmitter at Cutler,Maine, USA (24.0 hz) and the transmitter at Seattle, Washington., USA (24.8 hz). At all stations and for both transmitters, the in-phase and out-of-phase (quadrature) of the resultant E.M. field were measured. Processing and imaging of the data was conducted by Roman Tykajlo. This work has been filed for assessment and a copy of a report that covers this work was completed by Gordon J. Allen, P.Geo.

A series of short length VLF-EM conductors were mapped by the survey. Some appear to be closely coincident with sections of the iron formation, while others do not. The responses could reflect areas of conductive mt within the iron formation and/or argillaceous interbeds.

The proton procession magnetometer used during this survey was not accurate in areas of high magnetic gradient over the mt-rich iron formations. A series of magnetic lows, which represent reversed polarity were delineated over the zones of iron formation. The analytical signal of the total magnetic field gives a closer approximation to axes of magnetic highs; however, data issues both with the widely spaced grid and station coordinates were encountered. It was therefore recommended that better and more accurate positioning and collection of magnetic data could be obtained from a continuous reading "walking magnetometer" such as a cesium vapour or an Overhauser instrument and so subsequently a second magnetic survey was completed.

Ground Overhauser Magnetic Survey

The ground Overhauser magnetic surveying was conducted by Clearview Geophysical Ltd. of Toronto, Ontario and was carried out concurrent with diamond drilling. The survey was conducted using two Scintrex SM5 NavMag magnetometers. The internal GPS from the NavMag was used for navigation and positioning. The magnetometer sensor was located on a vertical staff and the GPS sensor antenna was located on a backpack carried by the operator. Readings were acquired at one second intervals. GEM Systems Overhauser magnetometers were used for the base station corrections with readings taken at one second intervals. Results from the survey were used to help select the drill sites.

Post-processing of the data was completed by Kit Campbell, of Intrepid Geophysics of North Vancouver, British Columbia. Filtering transformations (in Fourier domain) generated secondary products with enhanced information content. The enhancements made to the data included vertical and horizontal derivatives, to produce anomaly contrasts over the peaks and edges of the formation.

Diamond Drilling

The diamond drilling program consisted of a total of 2,301 m of drilling in 11 drillholes. This program is discussed under "Drilling".

el sol drilling iron exploration

Drilling

Historic Drilling

During the winter of 1956-1957, the extent of the A zone and B zone of the El Sol Property were tested by a total of 10,363 m of drilling in 67 holes. Core size is unknown and no core is known to have survived. The drilling was done by Continental Diamond Drilling of Rouyn, Quebec. Most holes were drilled on 122 m spaced sections, at inclinations of -45°, and all but one hole was drilled to the north. Multiple holes were drilled along selected 61 m spaced cross sections. The holes were mostly 122 m to 183 m long, with two steeper inclined holes greater than 987 m. Typically the drilling tested the deposit to depths of 76 m to 91 m. Drill core assays were completed by Thomas Heys and Sons, of Toronto, Ontario which is believed by WGM to have been a commercial lab.

Raytec estimated the position of the historic drillholes on a best-fit basis from available maps and local grid coordinates on historic drill logs and sections. These historic documents are preserved as MNDM assessment files and/or as documents in the office of the Regional Geologist at Red Lake. Information about drillhole specifics was preserved by these original sources, but sample and assay data was incomplete.
Raytec located the casing for drillhole ES57-032 off the north shore of Jean Lake. The bulk sample trench above drillhole ES57-055 was also found, as was the original iron formation outcrop for which the 1956 El Sol Property channel sample results have been reported. These locations were used to adjust positions for the other historic drillholes.

Out of a total of 67 historic drillholes, all but four holes intersected iron formation. Sample assay results are available for 22 of 42 drillholes on the A zone, and 10 of 15 drillholes on the B zone. All drill holes were assayed for Fe, and some were assayed for P, S, SiO2, and other deleterious elements. There are no indications of analytical methods and there is no drill core available for review. Nevertheless, the available results provide a coherent picture of the deposit to which the 2008 results may be compared.

Raytec's 2008 Drilling Program

General

Drilling by Raytec started October 1, 2008 and was completed October 28, 2008. Hy-tec Drilling Ltd., of Smithers, British Columbia, carried out the drilling program. Drilling was conducted using two heli-portable Tech 500 rigs which were moved and supported with an ASTAR 350 B2 helicopter provided by Forest Helicopters Inc. of Kenora.

Drilling sites were selected to test widely spaced intervals along the A zone. Due to the widespread, boggy ground to the south of the A zone, drill sites were limited to areas with suitable conditions to support a drill rig. Drill locations were spotted along approximate north-south trending cut lines. Sites were cleared and drill pads were built in advance of drill moves.

Eight holes (ES08-001 to 008) were drilled along five sections of the A zone in the Kesaka Far East area, towards Jean Lake. Two holes (ES08-009, 010) were drilled along two sections at the Kesaka East area, located northeast of Kesaka Lake. One hole (ES08-011) was drilled in the Kesaka West area, approximately 100 m off the western shore of Kesaka Lake.

After completion of the drill program, the core was mobilized to Red Lake, Ontario, by Barrens Transportation.

Drillhole Collar and Down-Hole Surveying

The drill rig was positioned on elevated drill pads and aligned with two foresites on the cut lines. The drillhole collar inclination was set using a carpenter's inclinometer and was later checked by the geologist, with a Brunton compass. Downhole surveys were conducted approximately every 50 m downhole with a Ranger single shot downhole survey tool (from Ranger Survey Systems Canada, Inc.) operated by the drill crew. However, since the instrument was affected by the magnetic field associated with the iron formation, only measurements of inclination were accepted as valid. Downhole drillhole az is assumed to be the same as the collar az.

After each drillhole was completed, the casing entry point was marked with a cut log. A metal tag indicating drillhole details was attached to this collar marker and photographs were taken of the site. A metal anchor rod also remains at each pad location. DGPS surveying of 10 of 11 of the drillholes, as well as a located metal casing of historic drillhole ES57-032, was completed by surveyor Eric Rody, O.L.S. A metal survey reference pin was installed between the drill pad sites for holes ES08-001/002 and ES08-003.

To complete the DGPS survey, the surveyor located the DGPS base station on this monument.    A roving unit was successively moved from drillhole to drillhole. GPS signals in the area were difficult to obtain, due to the tall tree cover surrounding the drill sites, as well as the low trajectory of satellites over the area. Long data collection times at each survey point were required to ensure data was within acceptable error limits. Eric Rody provided the final list of coordinates as UTM NAD83, zone 15.

Sampling Method and Approach

General

Northern Iron has completed no sampling of the El Sol Property. Raytec, LEC's predecessor company, has conducted one exploration program on the El Sol Property.

Historic Drill Core Sampling

Incomplete information is available concerning El Sol's 1956 and 1957 drillhole core sampling. Some of the preserved and available drill logs and cross sections report drill core sample locations, but much of the data is missing.

2008 Drill Core Handling and Logging

The drill core was transported daily, from each drill pad location by helicopter. Wooden core boxes were stacked, covered, and strapped into a steel caged basket which was slung back to camp each day. Geotechnical logging including RQD of the drill core was conducted at the field camp. Overall core recovery and RQD were both very good, averaging 98.6% and 76.2%, respectively. Only brief drill core logs were completed in the field. Comprehensive descriptive logging was not done until the core was transported to Red Lake, Ontario, at the end of the drill program where sampling was also completed.

The drill core was logged and sampled at a fully equipped core shack facility rented from Premier Gold Mines Ltd. Drill core logging and geotechnical data collection were completed by Janice Fingler, P.Geo, and James Thurston. Drill core sampling and packaging was completed by Willy Desmeules of Ackewance.

Before being logged, the drill core was re-oriented. The drill core was logged for general lithology and structure. Selected sample intervals were also logged for detailed lithology within these intervals. Estimates of the relative components of the iron formation were made and coded in order of relative proportions: as mt, chert, chloritic mudstone, jasper and sediment interbeds. The presence of garnets and grunerite were also included in the coding. A measurement of magnetic susceptibility was taken within each drill run interval using a KT-9 handheld unit. Due to the high proportion of mt within the iron formation, readings taken within the iron formation mostly exceeded the detection limits of the instrument.

2008 Sampling Approach

Samples were laid out nominally at 3 m intervals, but were also delimited at lithic unit boundaries at both shorter and longer intervals. The sample selected for in-field bulk density measurements were laid out at approximate 1 m intervals. Un-mineralized greywacke from the first few drillholes of the program was sampled and this material was put aside for insertion into the sample stream as blanks as required. Samples submitted from the field included FB and FDC consisting of second half sawn core. One FB and one FDC were included with every 20 regular samples submitted for analysis.

2008 Sampling Method

Sample intervals and numbers were marked on the core using China markers. Sequentially numbered, two part sample tickets, together with an aluminum tag containing sample interval information, were stapled into the core trays near the end of each regular sample. Tags for designated FB and FDC samples were included. The blank tags were positioned at the start of the sample they precede; the duplicate tags were placed after the sample they follow.

Details about all samples submitted were recorded on the original drill logs. After samples were marked and tagged, the core boxes were photographed with core both wet and dry. A total of 429 samples were submitted for analysis, including 20 blanks and 22 second half core FDC. This represented 407 sample intervals over a length of 1064.45 m. The average sample length was 2.62 m.

In-field bulk density measurements were made on 47 samples which represented a variety of lithological units with variable iron content. A total of 38 of these measurements were made on intervals sampled and sent for assay at SGS Lakefield Research (one of these was on an FDC). The whole core samples were weighed in air and in water.

All of the core samples were sawn in half using a diamond saw. One half of the core was returned to the core tray and the other half was inserted, together with the sample tag, into a poly sample bag labelled with the sample number. When the sampler encountered a tag for a blank sample, the designed blank sample and the new tag was transferred into a new bag with the new sample number. When the sampler encountered a tag for a FDC sample, the sampler placed the remaining half core for the preceding interval and the sample tag into a bag with the indicated number. The resultant gap in the core box was replaced with a wooden block bearing a metal tag with information about the two samples: regular and duplicate, for the interval. The bags were sealed and also put into individual, labelled rice bags for additional strength for transportation to the laboratory.

Five samples (5751 to 5755) were selected for preliminary metallurgical tests. These were packed into three sealed sample pails, together with a shipping list.

All samples were loaded sequentially into three large wooden crates with shipping lists and sent to SGS Lakefield Research.

Core Storage

At the end of the program the core trays were cross piled. The core is currently stored at Barrens Transportation in Red Lake.

Sample Preparation, Assaying and Security

2008 Sample Preparation

All in-lab sample preparation mandated by Raytec was performed by SGS Lakefield Research, which is accredited under the Standards Council of Canada. Their scope of accreditation conforms to the requirements of CAN−P−1579 Guidelines for the Accreditation of Mineral Analysis Testing Laboratories and CAN−P−4E (ISO/IEC 17025:2005), General Requirements for the Competence of Testing and Calibration Laboratories for individual analytical and sample preparation methods. Each of the 429 drill core samples including FBs and second half core Duplicates was cone-crushed to nominal 1/4" and a 1 kg sub-sample was then riffled out. The 1 kg sub-sample was stage-crushed to -10 mesh and one 100 g test charge was prepared, while the remainder was stored. In addition 18 of the routine samples were selected by Raytec to be prepared as –A and –B suffixed preparation duplicates. For these samples, an additional 100 g test charge was prepared of -10 mesh material.

The 100 g portions were pulverized in a ring pulverizer to 200 mesh (75 μm) and then sent for analysis.

All sample rejects were re-packaged using the original sample bags and are currently stored by SGS Lakefield Research.

2008 Sample Assaying

Raytec's drill core samples were analyzed for major whole rock element oxides, including Fe2O3, by lithium metaborate fusion XRF. FeO was determined by H2SO4/HF acid digest-potassium dichromate titration. Magnetic iron, expressed on SGS Lakefield Research certificates in terms of mt, was completed on Satmagan, a piece of equipment especially designed to measure mt in iron ore concentrations. Specific gravity was done by helium comparison pycnometer. The five samples on which the optimization grind testwork was performed were also analysed for sulphur. Sulphur was determined by combustion followed by infrared detection on LECO Corporation instrumentation. Additionally, 50 samples had bulk density determined on whole core prior to crushing. Each sample was weighed in air and weighed when submerged in water.

Excluding the B-Preparation Duplicate portions, but including the field-inserted blanks and second half core duplicates, a total of 429 samples were sent for assay.

Quality Assurance and Quality Control

Raytec conducted an in-field quality assurance and quality control program by inserting blanks and second half drill core duplicates into the sample stream. One field blank and one second half core field duplicate were included with every regular 20 samples submitted for analysis. The FBs were unmineralized greywacke inserted into the sample stream as required and given a routine sequential sample number. SGS Lakefield Research also conducted its own internal quality assurance/quality control program using Blanks, and reference Standards. The preparation duplicate component was as aforementioned, performed in-lab, but the samples for this were selected by Raytec. Preparation duplicates consisted of a second charge of material riffled out of the -10 mesh reject and then treated as a new sample.

Field Blanks

Twenty-two FBs were assayed during the drill program. All of the samples correctly returned assays commensurate with the samples being unmineralized greywacke.

Second Half Core Duplicates

Twenty-one second half core duplicates were inserted into the sample stream by Raytec and sent blind to the lab. Correlation between assays for equivalent pairs is excellent.

Certified Reference Standards and Laboratory Blanks

As part of its in-house quality assurance/quality control, SGS Lakefield Research analyzed certified reference standards and blanks with every batch of Raytec's samples. Seventy-six instances of certified reference standards, including blanks, were assayed by SGS Lakefield Research through the assay program. In total eight different Standards were used.

Mineral Processing and Metallurgical Testing

The initial LIMS testwork was conducted on five samples of drill core selected by Raytec. Three charges were used for grind curve determination, three for Davis Tube testing by size, and one for head assays. The objective of the grind curve determination was to estimate the required grinding time to achieve the grinding targets for Davis Tube testing. The grinding targets were 100% passing 200 mesh (75 μm), 325 mesh (45 μm), and 400 mesh (38 μm). In order to generate the grinding curve, three 100 g test charges were pulverized for 90 seconds, 150 seconds and 210 seconds in a ring pulverizer. The ground products were then submitted for wet particle size analysis.

Although this work showed no consistent trends with the various rock types in the metallurgical responses, it consistently reflected that fine grinding was required to achieve marketable grades of iron and silica in the concentrates. This was consistent with the conclusions reached in the 1956 and 1957 testwork campaigns.

Subsequently, SGS Lakefield Research was contracted to conduct a test program on a master composite prepared from the 2008 drill core samples. This program was aimed at developing a flowsheet to produce saleable Fe concentrates (less than 4% SiO2), which would include magnetic separation followed by the removal of silicates using reverse flotation. The master composite was made up of 298 of the original 424 variability samples that graded 31.6% Fe, 43.6% SiO2 and contained 38.5% mt.

Three batch LIMS and flotation kinetics tests conducted on whole ore showed that a primary grind of K80 of 50 μm (100% passing 150 mesh) was sufficient to produce an Fe concentrate grading less than 4% SiO2. Batch rougher tests on a bulk LIMS concentrate did not show any effect of caustic starch or sodium silicate dosage. Batch cleaner (Fe scavenger) tests indicated that the addition of a LIMS stage after regrinding to a K80 of 25μm was beneficial in scavenging the majority of the Fe lost to the silicate rougher concentrate. The addition of a scavenger cleaner flotation stage would help ensure that the Fe scavenger concentrate was on-spec and therefore could be blended with the primary Fe concentrate (SiO2 rougher tailings). A single locked cycle test conducted on the LIMS concentrate produced a final combined Fe concentrate grading 68.0% Fe, 3.86% SiO2, 0.18% Al2O3, 0.27% MgO, and 0.43% CaO at 84.6% Fe recovery and 39.4% mass recovery.

Mineral Resource and Mineral Reserve Estimates

No NI 43-101 compliant mineral resource or mineral reserve estimates have been completed for the El Sol Property.

Interpretation and Conclusions

  • With the information and technical data available on the El Sol Property coupled with WGM‘s knowledge of the iron ore industry the following interpretations and conclusions have been drawn by WGM in the El Sol Report:
  • The El Sol Property likely ranks as one of the top 10 deposits in iron formation known in Ontario. Although there are limitations with the project size, there is reasonable potential that a combination of product type and quality available on the Great Lakes with the transportation advantage to central North American markets can be viable in the current iron ore market.
  • In the late 1950s the El Sol Property was explored by 67 drillholes aggregating 10,363 m. The deposit in the form of a fold with two steeply dipping limbs was delineated. This work led to the definition of a deposit of 312 million tons of "reserves" averaging 31.1 % Fe to a vertical depth of approximately 300 m. A Qualified Person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves under NI 43-101 and Northern Iron is not treating the historical estimate as current mineral resources or mineral reserves. These "reserves" are non-compliant with guidelines of NI 43-101 and should not be relied upon, but they are of historic significance.
  • Preliminary mine planning in the late 1950s suggested the steeply dipping deposit could be open pitted to a depth of 250 ft depending on assumptions to allow for mining of 60 million tons or 20% of deposit "reserve" tonnage.
  • In the late 1950s, metallurgical testwork was completed at SGS Lakefield Research and at Lurgi in Germany. The testwork showed that high quality concentrates could be produced by fine grinding the mineralization and subjecting it to low intensity magnetic concentration.
  • Raytec‘s 2008 exploration program focused on the A zone (the north limb) of the deposit and has successfully validated in general the historic data available, where tested in terms of extent, widths, and composition of mineralization.
  • The iron oxide formation deposit is mainly fine grained mt, with minor hematite. Gangue components are mainly iron-bearing silicates: hornblende, actinolite and chlorite. The average grade for all 314 of Raytec‘s regular drill core oxide iron formation samples was 31.8 % TFe, 39.1% mt, 1.3% hematite (calculated) and with an average of 13.0% of the TFe in other mineral phases (most likely iron-bearing silicates).
  • Much of the historic information concerning drillhole assays, drillhole locations, assay methods and certificates is missing, and no drill core has been located. In order to verify the historical information, additional drilling will be required to allow for a NI 43-101 mineral resource estimate encompassing the known historic deposit on the El Sol Property to be completed.
  • The metallurgical characteristics of the mineralization determined on the limited work completed more recently by Raytec to date has been consistent with the more extensive historical metallurgical testwork in the 1956 and 1957 period.
  • The mineralization is mostly mt which allows high iron recoveries with the finer grinding and provides for a high concentration ratio. Magnetite allows for production of a high quality concentrate with 70% Fe and SiO2 in the 2% to 4% range.
  • The 2010 testwork including flotation of silica with LIMS concentration has shown that grinding to 100% passing 150 mesh will produce iron concentrates of saleable specifications. Regrind of the initial LIMS stage tailings will allow further production of concentrates of saleable specification. The flowsheet used in 2010 indicates that the grinding energy requirements can be reduced with a combination of stage grinding and employing silica flotation to clean the magnetic concentrates. These results are regarded as an improvement on the high energy requirements indicated by historical testwork.
  • Further testwork across the El Sol Property will be required to confirm metallurgical conclusions on variations in ore type and to confirm the optimum grinding level for each stage. Mineralogical work is also required to verify mineralogical content and the natural grain size, to help optimize production of marketable concentrates. This work would be supported with a program to assess the liberation of the iron mineralization in the concentrates being produced across a range of fine grinding levels to better define the optimum.
  • Final concentrates require further testwork to confirm their suitability for the production of pellets. Additionally, testwork may be conducted on the technical viability of producing DRI from pellets and from concentrate.
  • The most significant challenge facing development of the El Sol Property may be the smaller size of the deposit and the scale of project that could be sustained with the historic mine size suggested. With the North American market limitations and the possible inability to realize the economies of a large scale project, the resulting costs may make it difficult to compete with the larger scale of other North American production. Supplemental challenges are the steep dip and relative narrow width of mineralization which will result in higher stripping ratios in the mine operation, and the high energy and operating costs that are associated with fine grinding to produce the concentrates. The remote location of the deposit will require relatively high capital and operating costs for the supporting infrastructure to develop and operate the mine. Transportation, concentrating and pelletizing costs are expected to be proportionally higher. A conceptual and market study of the El Sol Property and possibly in conjunction with neighbouring iron projects should be undertaken to review various development approaches to assess project viability.

Proposed Program

The El Sol Technical Report contains the following proposed work program for the El Sol Property:

proposed program el sol