Griffith
Griffith
Griffith
Griffith

The Griffith Property

Location

The Griffith (former Griffith Iron Mine) Property, approximately 1,776 hectares in size, consisting of 11 unpatented contiguous mining claims, is situated on Highway 105 North of the town of Ear Falls. The mine was in production from 1968 until 1986. 120 Mt (Non 43-101) historic reserves still sitting at the mine.

The Griffith Property is situated on National Topographic System Map Sheet 052K/14SE, Bruce Lake Township, Red Lake Mining Division, District of Kenora, Northwest Ontario. The approximate centre of the Griffith Property is located at Longitude 92o22‘40‖W; Latitude 50o48‘37‖N (473,440mE, 5,628,240mN – NAD 83, Zone 15).

Access

The Griffith Property is situated approximately 26 km north of Ear Falls and connected to Paved Route 105 by the Griffith Mine Road to the east, a distance of approximately 1.5 km. Excellent access throughout the Griffith Property is provided by an extensive network of mine hauling and gravel roads left from the Griffith Mine operations.

Property Description and Ownership

The table below provides details of the current land holdings.

The registered owner of the claims listed in the MNDM claims database is Northern Iron. Larry Kenneth Herbert transferred 100% interest in claims numbered 4241228, 4241227, 4241226, 4229705, 4212693, 4222833, 4229700, 1184105, 4222834, 4229701 and 4229702 to Northern Iron Corp. on August 4, 2010. The claims are in good standing.

Mining properties staked under the Ontario Mining Act give the claim holder exclusive rights to explore for any mineral staked on Crown land with the exception of sand, gravel and peat. Ground staked claims do not include surface rights and are not legally surveyed. Expenditures of $400 annually per 16 hectare units for approved assessment work, non-applicable to Year I, are required with respect to Year II and subsequent years until the claim holder applies for a mining lease.

Property Agreements

Under a purchase agreement dated January 5, 2010, Northern Iron acquired ownership of 100% of the Griffith Property from Larry Kenneth Herbert on August 4, 2010. Mr. Herbert received 2,000,000 Common Shares of Northern Iron and $6,000 in cash from Northern Iron. Mr. Herbert retains the right to a 1% NSR from the claims on the Griffith Property. The purchase agreement excluded the transfer of any surface rights on the Griffith Property, which were retained by Mr. Herbert.

Permitting

No exploration or environmental permits were required with respect to the Griffith Property.

An application for a permit to de-water the North Pit of the Griffith Property is in the process of being submitted by Northern Iron to the MNDM/Ontario Ministry of the Environment. Requested water quality tests, performed during February 2011, with respect to the North Pit and Bruce Lake areas returned satisfactory results meeting water quality specifications. However, though water quality meets regulations, Northern Iron is required to obtain a Category 3 permit due to the quantity of water and duration of pumping. An impact assessment study is required before Northern Iron applies for a permit and the study will need to be included in the application.

Environmental Issues

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

Climate

The Red Lake District, situated in Northwest Ontario, experiences a continental climate, warm summers and cold winters with temperatures ranging from 27oC to lows of -30oC. Winters last until April or May and freeze-up occurs by mid-November. Drilling is often carried out in the winter months due to snow cover facilitating mobility.

Physiography

The Griffith Property, having a general elevation of 350m above sea level, borders Bruce Lake. Pakwash Lake occurs to the west beyond claim boundaries. The Griffith Property is predominantly situated on dry ground with gentle topography, interspersed by two open pits and forest screens. Vegetation varies from grasses, coniferous and deciduous trees.

Surficial geology consists of five map units. Mine tailings consisting of fine to very fine sand, 1 to15 m thick predominate. Flanking to the north and west are slivers of Holocene organic deposits, peat and muck, 1 to 4 m thick. Late Wisconsinan deep water glaciolacustrine laminated to varied clay, silt and fine sand, 1 to 50 m thick, is ubiquitous beyond the general property area. A unit of drift and bedrock occur as two patches in close proximity, roughly corresponding with the North Pit area. Glacial drift within the vicinity is 1 to 3 m thick in depressions. Four small patches of glacial outwash consisting of sand and gravel, 1 to 4m thick, occur immediately west of the Griffith Property. Ice flow direction from glacial striations is predominantly 270 degrees.

Local Resources and Infrastructure

griffith iron mine infraestructure

The Township of Ear Falls, located on the north shore of Lac Seul, having a population of 1,153 persons is situated 69 km south of the Municipality of Red Lake, the primary industrial centre for the Red Lake mining district.

The site of world class gold mining operations, a very skilled mining labour force is attracted to Red Lake, having a population of 4,526. Specifically in the Ear Falls area, in addition to mining, forestry, lumber production and hydroelectric power are important primary industries.

Transportation within the Red Lake District is by road, rail or air. Paved Route 105 connects Ear Falls and Red Lake with the Trans Canada Highway (Route 17), 100 km to the south. Ore was moved from the Griffith Mine (now closed) via railway (the rail bed still exists) connecting with the Canadian National Railway line to the south. Small airfields in relatively close proximity to the Griffith Property are situated at Ear Falls and Red Lake.

Surface rights to a portion of land included on the Griffith Property are held by the Township of Ear Falls and 2104170 Ontario Inc. Sufficiency of surface rights for mining operations must be determined. Potential tailings storage areas, potential waste disposal areas and potential plant processing sites are in place from the historical Griffith Mine, but sufficiency and availability for impending future mining operations must be determined. Although water sources are available locally, sufficiency must be determined. West of the Griffith Property, a power line sub-parallels Route 105. A remnant of the Griffith Property mining operation is a capped natural gas pipeline situated on the Griffith Property.

History

The Griffith Property was originally staked in 1953 by L. Dempster, J. Dempster and A. C. Mosher, employees of a syndicate managed by Calmor Mines Limited. Iron Bay Mines Limited was formed in February 1954 and acquired the Griffith Property. An option agreement between Iron Bay Mines Limited and the Cleveland-Cliffs Iron Company in 1959 resulted in the undertaking of a joint venture program, at least until 1960.
The Griffith Property was optioned in 1963 to Taconite Lake Iron Co. Ltd., a subsidiary of Pickands Mather & Co. This option, on behalf of Pickands Mather & Co. and Stelco gave Pickands Mather & Co. exclusive rights for a two year period to explore and evaluate the Griffith Property. Taconite Lake Iron Co. Ltd. exercised its option on April 27, 1965, acquiring a 75-year lease on all mining lands held by Iron Bay Mines Limited in the Bruce Lake area.

Griffith Iron geological plan view

Taconite Lake Iron Co. Ltd. assigned all of its interest in the Griffith Property to Stelco by indenture on August 16, 1965. The Griffith Property was named the Griffith Mine and Pickands Mather & Co. was the managing operator. In March of 1966, Stelco publicly announced the decision to bring the mine into production by 1968. Iron Bay Mines Limited changed its name in June 1966 to Calmor Iron Bay Mines Limited.

The Griffith Property was leased from Calmor Iron Bay Mines Limited and the Iron Bay Trust and Chimo Gold Mines Limited held shares in each company ("Pit expansion starts big Griffith iron mine" The Northern Miner, July 26, 1973 issue). Late in 1978, Calmor Iron Bay Mines Limited and International Mogul Mines (Ontario) Limited amalgamated to form Calmor Iron Bay Mines (1978) Limited. This company, whose name was changed to Calmor Iron Bay Mines (1979) Limited, became a wholly owned subsidiary of International Mogul Mines Limited in 1979. Following the 1986 mine closure, the Griffith Property was withdrawn from staking.
Larry Kenneth Herbert acquired 100% ownership of claims staked on his behalf by D. M. Robertson in 2008 and 2009 and by R. M. Quedent in 2009. Herbert‘s 100% interest was transferred on August 4, 2010 to Northern Iron, the current claim holder.

Griffith geological section Iron

Previous Exploration and Development

During the 20th Century, progressively larger exploration programs were undertaken with successive favourable results, eventually leading to development of the Griffith Mine.

Several conflicting accounts of discovery and early exploration of the Bruce Lake iron formation exist and are summarized in the Griffith Technical Report.

Under Pickands Mather & Co.‘s supervision, Canadian Bechtel Limited, the engineering and construction contractor, commenced clearing on the Griffith Mine, and excavation for the plant buildings in March 1966. The plant was designed for a capacity rate of 13,000 long t (dry) crude ore per day for an 86.28% magnetic iron unit recovery (i.e., about 4,200 t of pellets per day). A primary crushing plant was designed to crush run-of-the mill ore to a nominal eight-inch size. Processing and service facilities were housed in the same building to provide more efficient operations and to facilitate communications and logistics.

A single-line track railway spur line for transportation of pellets was completed in October 1967 by Canadian National Railway, connecting the Griffith Property with Amesdale, Ontario, 107.8 km south of the Griffith Property. The pellets were shipped to Thunder Bay, Ontario and stored at the stocking and shipping facilities prior to shipping by water to Stelco in Hamilton, Ontario. Electricity was provided by an Ontario Hydro transmission line, 3.2 km west of the Griffith Property. A Trans-Canada pipeline provided natural gas for the induration furnaces and plant heating systems. The 6-inch, welded steel pipeline running 117.48 km to the plant is still present on the Griffith Property and is currently capped off.

The North Pit was expected to be 1676.40 m long, 640.08 m wide and 335.28 m deep. Stripping operations began at the North Pit on June 1, 1966 and due to the location of the deposit which was partially under the lake, it was necessary to dyke off parts of Bruce Lake and also construct a tailings retention dyke between the north and south basins of the lake. By June, 1966, construction of a dredging disposal basin was in progress. The dykes, with an overall length of 3.2 km were completed over a two year period.

The first pellets were produced on February 26, 1968 from ore taken solely from the North Pit and the first shipment was made March 13, 1968.

Since 1974, both pits have been mined. A direct reduction kiln which achieved 89% to 93% metallization was added to the mine facilities. The first sponge iron was produced from this kiln on the site reduction plant in May 1975. Diamond drilling to determine bank stability was carried on regularly. Exploration or developmental drilling was not performed between 1975 and 1980. Installation of plant equipment to recover fine iron from flotation tailings began in 1978.

The mine operated at full capacity until the end of June 1982 and then at two-thirds capacity for the rest of the year.

Following closure of the Griffith Mine on March 31, 1986, remediation was carried out, building structures were removed and the two open pits subsequently flooded.

Historical Drilling

Historical drilling by Iron Bay Mines Limited, Taconite Lake Iron Co. Ltd., Stelco and Pickands Mather & Co. between 1954 and 1972 totalled 15,206.78 m from 124 diamond drill holes. However, drilling between 1954 and 1986 totalled 18,288.00 m according to a 1986 statement by Stelco and Pickands Mather & Co.

Crude ore grading was based on diamond drilling, as the angle drilling was designed to intercept all geological horizons. The drill core was composited according to geological horizons and laboratory work was done on these composites which were correlated to actual mill results ("The Griffith Mine Story" F.P Morawski, J.D. Jeffries, D.M. Wilson, J.E. Schelske, J.R. Geddes, and B.R. Eberts, 1970; CIM Bulletin, Vol. 63, No. 703, November, pgs. 1271-1288). The core was split several times and part of the remaining core was given to the Ministry of Natural Resources when the Griffith Mine was closed ("The Griffith Mine, history and disposition of facilities after closure", Steel Company of Canada, Limited / Pickands Mather & Co. booklet, Author Unknown, 1986).

A search by the author of the Griffith Technical Report shows a total of 31 summary logs covering 24 holes drilled in 1954, six holes drilled in 1956 and one hole drilled in 1959 totaling 3,810.91 m by Iron Bay Mines Limited. In addition, a total of six drill logs covering three holes drilled in 1963, one hole drilled in 1966 and one hole drilled in 1971 totaling 1,036.62 meters by Pickands Mather & Co. exist. A total of 4,847.53 m logged in summaries, from 37 inclined core size, diamond drill holes, or approximately 26.5% of 18,288.00 meters, are known to have survived on the Griffith Mine. Precise UTM coordinates are, at best, an educated guess. Northern Iron has not found any information related to historical drilling procedures.

Historical analytical values are unreliable, and are not strictly in accordance with modern CIM Exploration Best Practices Guidelines with respect to NI 43-101 reporting. However, since the Griffith Mine was a significant producer, values should be considered template guidelines. Further verification of historical drilling results is not necessary but should be followed up pending any queries related to modern programs.

Exploration carried out by M. A. Dehn in 2008 on behalf of Larry Kenneth Hebert consisted of a small trenching program totalling 10 trenches/pits. Trenches, typically 50.0 m in length and 4.0 m deep, encountered overburden, not reaching bedrock and the anticipated schist greywacke or iron formation. Several vertical holes to test the interpreted strike of the iron formation between the North and South Pits were recommended. Dehn specifically mentioned ―most of the historic documentation of the Griffith Mine was destroyed when the mine closed‖. The Griffith Mine was closed on March 31, 1986.

Historical Resources

Historical resources estimates are listed as chronologically accurate as possible for pre-mining (exploratory), mining operations and post-production phases of the Griffith Mine.

The author of the Griffith Technical Report cites the report entitled "Geology of the Bruce Lake Area, District of Kenora, Ontario Department of Mines, Geological Report" by R. Shklanka (1970), which identified Iron Bay Mines Limited as the original source of historical resources for the Griffith Property. By 1960, Iron Bay Mines Limited in its 6th Annual Report estimated that the Griffith Property contained a minimum of 250 million long t of crude ore which could produce an estimated minimum of 100 million long t of concentrate. More recent figures on the Griffith Property are not available. However in 1968, reserves for the North Pit were stated as sufficient to produce 1.5 million t of concentrate per year for 25 to 30 years ("Newest iron mine Stelco‘s Griffith officially opened" Northern Miner Press, June 20, 1968). Preliminary test work on bulk samples and drill core indicated little variation in the iron content for the North and South Pits with samples from the South Pit grading 31.0% and from the North Pit grading 29.3% (Iron Bay Mines Limited, 6th Annual Report).

In 1966, Stelco announced the Griffith Property contained 250 million t of crude ore grading 32% Fe from which 100 million t of concentrate could be produced. The North Pit alone was estimated to be able to produce 1.5 million t of concentrate per year for 25 to 30 years (Mineral Resources Branch, Department of Energy, Mines and Resources, Ottawa). Run-of-pit ore grades were about 26% Fe. A concentrate averaging 66.5% Fe and 4% SiO2 was expected by grinding to -325 mesh ("Iron Deposits of Ontario" R. Shklanka, 1968).

A later estimate of the ore contained in the two deposits was 120 million t averaging 29% total Fe having an overall weight recovery of 32% and magnetic iron unit recovery of 86.28%, to produce a concentrate containing 68.8% Fe. This estimate was noted by Mineral Resources Branch, Department of Energy, Mines and Resources, Ottawa and currently recorded in MNDM records.

In 1986, Stelco and Pickands Mather & Co. stated: ―at closure an estimated 41 million t of concentrate remained within the North Pit limits and 2 million t in the South Pit‖, however, a grade was not quoted ("The Griffith Mine, history and disposition of facilities after closure", Steel Company of Canada, Limited / Pickands Mather & Co. booklet, Author Unknown, 1986). This estimate, in the opinion of the author of the Griffith Technical Report, is the original and possibly the only source with respect to un-mined in-situ pit mineralization. M.J. Lavigne and B.T. Atkinson, Red Lake resident geologists, stated in 1986 that iron ―ore‖ reserves remain at 41 million t at 29% Fe (Report of Activities in Miscellaneous Paper by M.J. Lavigne and B.T. Atkinson (Regional and Resident Geologists) and edited by C.R. Kustra (Ontario Geological Survey), 1986).

There is an estimated 120 million t of iron-bearing rock grading 29% Fe remaining ("Report of Activities 2010, Resident Geologist Program, Red Lake Regional Resident Geologist Report: Red Lake and Kenora Districts" A.F. Lichtblau, C. Ravnaas, C.C. Storey, J. Bongfeldt, S. McDonald, H.C. Lockwood, N.A. Bennett and T. Jeffries, 2011; Ontario Geological Survey, Open File 6261).

Longevity of the Griffith Mine was estimated to be 25 to 30 years. The Griffith Mine operated for 18 years, from 1968 to 1986. A thirty year lifespan would have terminated in 1998. The Northern Miner reported in 1973 the combined tonnages from the North and South Pits would produce sufficient ore to feed the plant at the present capacity until 2005 ("Pit expansion starts big Griffith iron mine" The Northern Miner, July 26, 1973 issue). The author of the Griffith Technical Report does not understand this discrepancy.

The author of the Griffith Technical Report, in accordance with Section 2.4 of NI 43-101 has indentified the source and dates of the historical estimates. Relevance and reliability of the historical estimates, in the opinion of the author of the Griffith Technical Report, are only considered to be a guideline. Actual calculation records of the historical estimates apparently do not exist for reference with the possible exception of the 1960 Iron Bay Mines Limited, 6th Annual Report, which refers to initial pre-mining historical resources and not the post-production remaining in-situ historical resources. Northern Iron is not aware of any available recent estimates. Historical estimates, in the opinion of the author of the Griffith Technical Report, are not compatibly stated with respect to Sections 1.2 and 1.3 of NI 43-101. 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. As outlined in "Interpretation Conclusions" below, the historical estimates require complete re-evaluation.

Property Production

The Griffith Property produced iron ore from 1968 to 1986 until the closure of the Griffith Mine by Stelco. Production from 1968 to 1982 was approximately 20 million t of iron ore pellets. Through its lifetime, a total of 183.2 million t of crude ore, rock and surface from the North and South Pits (excluding dredging) was removed from the Griffith Mine and 22.85 million t of iron ore pellets, grading 66.7% Fe from 78.8 million t of crude grading 23.9% Fe was produced ("Report of Activities 2010, Resident Geologist Program, Red Lake Regional Resident Geologist Report: Red Lake and Kenora Districts" A.F. Lichtblau, C. Ravnaas, C.C. Storey, J. Bongfeldt, S. McDonald, H.C. Lockwood, N.A. Bennett and T. Jeffries, 2011; Ontario Geological Survey, Open File 6261; and "The Griffith Mine, history and disposition of facilities after closure", Steel Company of Canada, Limited / Pickands Mather & Co. booklet, Author Unknown, 1986). Production figures taken from the Mineral Deposit Inventory stated in the Ontario Geological Survey (Open File report 6261) were 82,031,500 t ore grading 30% (ore) estimated from pellet production.

At a full plant production rate of 1.5 million t of pellets annually, over 12 million t of material (crude ore, rock and surface) was moved from the open pits each year. During a three year tax exempt period (from 1970 to 1972) about 6 million t of all material was mined. Between 1973 and 1982, annual material averaged 12.875 million t with a high in 1977 of 14.2 million t ("The Griffith Mine, history and disposition of facilities after closure", Steel Company of Canada, Limited / Pickands Mather & Co. booklet, Author Unknown, 1986). Production initially came from the North Pit until the South Pit commenced mining in 1973.

The first iron ore pellets were shipped from the Griffith Mine site on March 13, 1968. Production reached rated capacity of 1.5 million t annually in 1970 and continued at this rate until 1982 when, due to depressed markets, the mine shut down for three months. The mine produced 60% of rated annual production that year, 50% of rated annual production in 1983, 63% of rated annual production in 1984 and 50% of rated annual production in 1985 and closed on March 31, 1986.

The main reasons cited for closure of the Griffith Mine were low demand for steel and high cost of pellets. The reasons attributed to the high cost of pellets included the large amount of material that had to be mined to produce a large quantity of product, the relatively small size of the operations which precluded economies of scale, the location of the mine which required a high cost rail transportation system to move pellets from the mine to the port at Thunder Bay, the high alkali content (in 1971, silica target changed from 4.5% to 3.60% to reduce alkali in pellet) and low reducibility of its pellets which increased the hot metal costs at Stelco‘s basic steelmaking facilities ("The Griffith Mine, history and disposition of facilities after closure", Steel Company of Canada, Limited / Pickands Mather & Co. booklet, Author Unknown, 1986).

Exploration

General

The 2010 exploration program on the Griffith Property by Northern Iron consisted of diamond drilling a single hole on the North Pit. Program coordination, Northern Iron and contractor personnel were under the direct supervision of Raul Sanabria, Northern Iron's Vice-President of Exploration and its qualified person with respect to the Griffith Property.

Drilling

An initial drilling program consisting of one hole was undertaken by Northern Iron in the Fall of 2010. The site of the hole with respect to the North Pit was selected from interpretation of collected archived geological data and, in part, validation of previous work.

Specific details of the hole are listed below:

Northern Iron interpreted diamond drill hole No. GR-10-01 drilling as supporting the rough accuracy of the North Pit model acquired from previous work and the existing Griffith Mine documents. Mt in various grades was encountered interbedded with amphibolite grade schists from 219.80 m depth to the end of the hole at 429.16 m depth, which terminated in an mt rich ore. Thus, the derived North Pit model consisting of several folded layered BIFs of varying grades is in-part, initially validated. Based upon results of a single drill hole, true thickness and mineralization orientation are unknown.

Drilling Procedures

Drilling by More Core Diamond was conducted using one B-15 skid drill that was moved and supported with a bulldozer and a low bed haul truck.

A wooden drill pad was not constructed, and the drill was placed directly on leveled ground and was further levelled with the use of a CAT bulldozer and some logs. WAAS enabled GPS surveying of the drill hole collar locations was done at the end of the program by Northern Iron's on-site geologist. The 'zero' elevation mark for all down hole measurements was surface. Topography contours were used as the elevation surface for the drill hole. Collar elevation is approximately 350m above sea level.

The drilling site was selected to test the main Griffith Property ore body located in the North Pit. It was designed to cut the fold limbs perpendicular to strike and the main purpose was to validate the grade and confirm the rough geometry of the ore body outlined from previous work and mine records. The site for the hole (GR-10-01) was on an overgrown haul road leading down into the North Pit on the southeast side of the pit. The hole had an azimuth of 254 degrees and an initial dip of 45 degrees, and was designed to cut the interpreted folded iron formation normal to the sub-parallel limbs.

After each drilling shift, the core was transported to Ear Falls by Northern Iron or More Core Diamond in trucks and is currently stored and secured in a core shack facility in Ear Falls. The core was geo-technically and geologically logged by Northern Iron‘s personnel. Core recovery was approximately 100%. Prior to logging, drill core was fitted and cleaned and core was examined for general lithology, structure and mineralization.

Estimates of mt content in the iron formation were visually made and the different components of the iron formation and surrounding lithologies were noted and coded. Following completion of drilling, casing was left in the hole and the casing entry point was marked with a cut branch and flagging tape.

Drill Hole Surveys

The drill was positioned on the ground and aligned with a flagged foresight and was later checked by the project geologist using a WAAS enabled GPS. Drill hole collar inclination was set using a carpenter‘s inclinometer. Down hole surveys were conducted approximately every 50 m down hole with a Ranger single shot down hole survey tool 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. Down hole azimuths were assumed to be the same as the collar azimuth.

Sampling Method and Approach

Core sampling and cutting by Northern Iron were restricted to mineralized intervals of BIF containing appreciable amounts of mt. Sample intervals were laid out nominally at 3 m intervals, but were also delimited at lithic contacts at shorter intervals. Non-mineralized commercial siliceous gardening stone was inserted into the sample stream as FBs at a ratio of 20 true samples to one FB.

Sample intervals and numbers were marked on the cut side of the core post-cutting using red lumber crayons. Metal tags containing sample number and interval information were stapled into core trays near the beginning of each sample. The FB tag was included and positioned just behind the tag of the preceding sample. After samples were marked and tagged, the core boxes were photographed with core wet.

All of the core samples were sawn in half using a diamond saw. One half of the core was returned to the core box and the other half was packaged and labelled as individual samples for transport to the SGS Lakefield Research preparation facility. FB samples were prepared, given sequential sample numbers and inserted where indicated.

Upon termination of logging, lids were screwed into all core boxes, and boxes were stored and cross-piled in the yard outside the Ear Falls core shack. Ackewance undertook drill core cutting, sample packaging and core storage under Northern Iron's supervision. Chain of custody involved personal delivery of samples in sealed tamper proof plastic sample bags stored in tied rice bags transported to the SGS Lakefield Research preparation laboratory by Northern Iron personnel.

Parameters to establish drill standardized core sampling intervals would seem to be based upon mt distribution and intersection lengths of the BIF host rocks. Sampling method included continuous sampling of mineralized sections and included high, low grade and intermediate non-mineralized intervals.

Sample Preparation

All in-lab sample preparation mandated by Northern Iron was performed by SGS Lakefield Research and splits were sent to SGS Lakefield Research for iron ore XRF analysis. Each sample was weighed in air and weighed when submerged in water. Each of the drill core samples including the FB were cone-crushed dry to 75% passing 2mm, split to 350g and pulverized to 85% passing 75μm.

There was no aspect of sample preparation involvement by employees, officers, directors or associates of Northern Iron.

Analysis

Analytical records show that Northern Iron submitted 52 drill core samples for analysis at the laboratory of SGS Lakefield Research. A signed certificate of analysis from an SGS Lakefield Research report dated November 23, 2010, included SiO2, Al2O3, Fe2O3, MgO, CaO, Na2O, K2O, TiO2, P2O5, MnO, Cr2O3, V2O5, Ni, Zr and S reported as a percentage. Whole rock analysis was by XRF with the exception of S which used whole rock analysis by carbon-sulphur analyzer.

Quality Assurance – Quality Control

Control quality by SGS Lakefield Research consisted of analyzing two laboratory duplicates. Northern Iron's quality assurance/quality control measures involved insertion of three FBs with the submitted samples (55 in total).

FBs showed only minor contamination, with the highest value being 1.90 % Al2O3 and all other values being less than or equal to one. This is deemed acceptable contamination, and the results are therefore considered reasonably accurate. Laboratory duplicates had an average discrepancy error of 5.44%, mainly due to differences in Zr and S values between duplicate samples. The greatest error in Fe% between duplicates was an increase of 1.05% in the duplicate sample, but these discrepancies are deemed insignificant by the author of the Griffith Technical Report.

Mineral Resource and Mineral Reserve Estimates

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

Interpretation and Conclusions

Visually, BIFs within the confines of the previously mined Griffith Mine open pits, particularly the North Pit, have not been seen for 25 years due to coverage by water. Initial diamond drilling and geological interpretation by Northern Iron have confirmed the presence of a BIF body of unsubstantiated parameters with respect to the North Pit.

Specifically remaining in-situ mineralization in the North Pit appears to be an upright structure undefined in three dimensions and internal anatomy. Although a former producer, this reasoning is qualified by paucity of critical documentation such as, historical drill core, drill summaries, assays and mine geological records, especially plans and sections.

Drilling by Northern Iron confirmed the presence of several folded units of BIF referenced to surviving pit plan and cross section records, supporting the model of BIF folding, historically outlined and interpreted as two steeply dipping synclines, one having an overturned limb, and a centre anticline, folded along northeast trending axis and plunging to the south.

The Griffith Property is an early stage exploration property. Attributes of the North Pit are currently undefined and historical references require complete re-evaluation. It is the opinion of the author of the Griffith Technical Report that an acute lack of data renders remaining in-situ mineralization of the North and South Pits as "uncertain" in terms of an NI 43-101 context and strict CIM Definition Standards with respect to mineral resources or mineral reserves.

To outline mineralization (tonnage and grade) having significant magnitude for further appraisal, certain aspects with respect to the North Pit must be recognized: (i) the pit dimensions are large and the floor is currently underwater, (ii) continuity of intersections between holes must be sufficiently demonstrated, (iii) uniformity or non- uniformity in grade with depth and along strike and (iv) structural complexity must be determined.

Based upon current understanding of the deposit from available information, the author of the Griffith Technical Report considers these issues to require attention through comprehensive delineation and evaluation. Most notably, tangible essential information on the North Pit is lacking.

Delineation drilling, as part of a two-phase work program, is required on the Griffith Property's North Pit to validate the historical "reserves" and to determine if sufficient parameters are present for eventual NI 43-101 compliant mineral resource to mineral reserve estimation.

Phase I dewatering is necessitated to initiate Phase II drilling. Upon receipt of permits, Northern Iron proposes to completely drain the North Pit over an expected three to four month period to expose the pre-existing 1986 pit floor utilizing high capacity pumps to expel the water, approximately 20 million cubic meters, into adjacent Bruce Lake. Dewatering is required prior to initiation of a comprehensive evaluation by drilling.

Phase II drilling proposed to test the mineralization to a maximum depth of 333 m, concurrent with the historical planned ultimate limits, is designed to cut the deposit perpendicularly by drilling 32 inclined holes on 13 lines, a total of 12,000 meters. It is anticipated drilling would adequately increase confidence levels regarding correlation between holes and any irregular distribution of the mineralization to provide a better understanding of the deposit.

The Griffith Property, a closed and inactive historical BIF mine, hosts currently unsubstantiated resources/reserves that are not compliant with NI 43-101.    Positive upgradeable potential and traits for hosting economic BIF mineralization with respect to the North Pit require detailed evaluation. First pass evaluation by Northern Iron achieved its objective regarding existence of the iron formation target via very preliminary validation by a single drill hole. A definition drilling program is required to delineate mineralization continuity and grade for subsequent undertaking of NI 43-101 compliant resource/reserve estimation.

Proposed Program

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


GRAND TOTAL: Advancement to Phase II is contingent upon receipt of positive results received from Phase I.