Horseshoe Island Project

Overview

The Horseshoe Island Property, located in Northwestern Ontario, is composed of 2088 hectares of contiguous mineral claims. The property is centered on Horseshoe Island in the east central part of Birch Lake, Red Lake Mining Division, approximately 102 kilometers east of the town of Red Lake, Ontario.

Gold Canyon Resources Inc. has obtained a purchase option of this property from Vital Resources Corp. Gold Canyon Resources Inc. has also obtained by means of "staking" an additional four (4) adjoining mining claims which are an integral part of the option purchase.

The property lies within the east-west trending Uchi Subprovince that stretches from northern Ontario into Manitoba. The Uchi Subprovince hosts the Red Lake, Pickle Lake and Rice Lake gold camps. The property lies within the Birch-Uchi Greenstone Belt between the Red Lake and Pickle Lake camps. Within the Birch-Uchi Belt Cycle III Arching-aged mafic and folic volcanic rocks and related sediments have been intruded by a late multi-phase gabbros to granodiorite intrusion, known as the Horseshoe Island Intrusion Complex. A principal structure known as the Swain Lake Deformation Zone trends northeast along the north shore of Birch Lake, about 800 meters northwest of Horseshoe Island. A secondary splay off of the Swain Lake Deformation Zone trends eastward and passes approximately 400 meters south of Horseshoe Island. The Horseshoe Island Property occurs in the wedge between these two faults, a structurally favorable setting for gold deposition.

Recorded exploration on the property dates back to the 1930's; however, more continuous exploration occurred between 1970 and 2000. The property, under different owners and by different exploration companies throughout its history, has received significant exploration activities. The property has received a total of 145 diamond drill holes in 24,139 meters as well as airborne and ground geophysics surveys, soil and humus geochemical surveys, prospecting, mapping and trenching. Unfortunately, the public records are selective and incomplete for this interesting prospect.

Public records show that drilling has successfully identified a 450 meter long sericitealbite- hematite+/-ankerite alteration zone coincident with a curvilinear fault or deformation zone that is likely a tertiary splay from the Swain Lake Deformation Zone. Within this alteration envelope are two sub parallel (that locally coalesce) steeply dipping gold-bearing mineralized zones, A and B Zones, on the south and southeast edge of Horseshoe Island. A third gold-bearing silicified mineralized zone, C Zone, lies 100 metres north of A and B Zones. The zones contain disseminated pyrite and visible gold. The zones generally average 2 metres thick but can reach up to 10 metres thick. Gold tenor reported is in the range of 4.6 to 6.7 grams per tonne gold (Au).

A number of historic resource estimates have been done by various workers. The most recent was prepared by Hemlo Gold Mines Inc. in 1989 with 892,872 tons grading 0.134 ounces per ton Au (4.6 grams per tonne Au). This is not a declared resource on the property, and should not be relied upon, but remain as historic figures. The writer has not prepared nor confirmed this resource estimation due to the incomplete and selective public records available. As it pre-dates National Instrument 43-101, it does not comply with NI 43-101 requirements for mineral resource estimation. As the information is only available in summary form, it is impossible to classify these figures based on current CIM standards on mineral resources and reserves.

Regardless of the incomplete public records the Horseshoe Island Property is a significant gold prospect. It is located in a positive regional setting, within the Archean-aged Uchi Subprovince known to host significant gold deposits. The local geology, particularly structurally, is positive with the presence of a tertiary deformation zone that locally hosts gold mineralization. The extent of drilling by multiple companies attests to the encouraging results they were having on this property, particularly by St. Joe Canada Inc. The observation that visible gold was fairly common yet not reflected in the assessment submitted data suggests that higher grade intercepts may have been made but that the companies were reluctant to disclose to the public record.

Even though the grade and size of the historic resource is sub-economic there is significant potential to build the mineralized system within, down dip and along strike, by drilling. There is potential for improving the grade with in-fill drilling with larger size diameter core.

The Horseshoe Island Property also has the potential of hosting a volcanogenic massive sulfide deposit, perhaps more zinc rich so as to be undetected by the geophysical surveys conducted to date there. The stratigraphy indicates a favourable geological setting for this type of deposit. The volcanogenic massive sulfide deposit mined out at the South Bay Mine 34 kilometres south of Horseshoe Island lends support to the potential of the region for this type of deposit. These types of deposits are known to form in clusters within mineral districts.