Kratz Spring REE Project

Location

The Kratz Spring IOCG deposit, located in Franklin County, Missouri, is centered on the southwest quarter of the southwest quarter of the northeast quarter of Section 30, Township 41 North Range 2 West of the United States Subdivision System. This area may be found on the Spring Bluff 7.5 Degree USGS Quadrangle. Gold Canyon Resources' mineral and mining right to the Kratz Spring IOCG deposit encompasses slightly more than 1,200 acres.

Regional Setting

IOCG deposits constitute some of the largest known REE resources in the world. Examples include the world class Olympic Dam uranium-copper-gold-silver-bearing deposit (Australia), the Bayan Obo REE-niobium deposit (China), numerous iron deposits in the Kiruna district (Sweden), the iron deposits in Proterozoic rocks of the St. Francois Mountains (southeast Missouri, USA) and in the Grenville province of New York - New Jersey (USA). Examples in Missouri include Pea Ridge, Pilot Knob, Iron Mountain and Kratz Spring; those in New York deposits include the Benson mines, Clifton, and Jayville; New Jersey deposits include Edison, Mt. Hope, Hibernia, Scrub Oaks and the Hurd mine.

In Missouri, the deeper hypothermal deposits (Pea Ridge, Kratz Spring, lower Pilot Knob, and Iron Mountain) are dominantly cored by magnetite-apatite ores with outer zones of hematite and amphibole skarns. Textural evidence supports both a magmatic and hydrothermal replacement origin for various parts of the deposits. Later magmatic-hydrothermal REE-Au-barite-rich breccia pipes cut the Pea Ridge deposit. Such pipes may be present in other hypothermal deposits. Midlevel deposits are represented by magnetite vein deposits (Shepard Mountain) and mesothermal magnetite- and hematite-volcanic breccia deposits (Boss-Bixby, Bourbon, Camels Hump). The Boss-Bixby deposit has the greatest known base-metal content at ~ 40 mt of 0.8 percent copper. The shallower epithermal deposits (Upper Pilot Knob) are hematite-rich exhalative deposits with some associated hematite-volcanic breccias, locally contain anomalous gold abundances, and are intercalated with intracaldera sediments that were deposited during the waning stages of regional volcanism.

The Pea Ridge IOCG deposit in Missouri contains an unexploited high-grade REE resource of unknown size in breccia pipes associated with 1.48-Ga granite and syenite. Bulk samples of REE rich breccia, which contain monazite and xenotime, average about 12% REEs. Although the Pea Ridge IOCG resource is LREE-dominated, it also contains significant HREEs.

Kratz Spring

The Kratz Spring IOCG deposit is divided into an eastern part and a western part, based primarily on geophysics. Reports state there is not enough drilling between the anomalies to tell if the area between the eastern and western areas is truly barren. The east part has depths to mineralization (Precambrian) of 1100-1500 feet, and the west part has depths of 1300-1600 feet. Fifteen core holes are reported to have been drilled on the deposit by the St. Joe Lead Company. Most of the cores went 200 to 400 feet into Precambrian, with a few going 500' or slightly over. Some of the ore is breccia hosted (FeOx-cemented) but there are mentions of massive ore zones in some of the logs, and some assays are almost 70% Fe over 20 foot intervals. The iron content appears to average in the 40-60% range. Mineralization is dominantly magnetite, with some hematite at the Precambrian surface. From limited core log information, it appears the Fe mineralization is at least 1200 feet in diameter. Mineralization extends to the Precambrian surface. The logs are reported as very basic, so we would not expect comment on the presence of sulfides. No assays of Kratz Spring drill core for REE's are known at this time.

Types of alteration observed in the core include silicification, chloritization, actinolitization, and potassic alteration with potassium feldspar flooding. Weathered rhyolite porphyry is argillized and sericitized. Apatite is a common mineral in mineralized zones. The apatite forms large crystals as much as 4 cm in diameter. Apatite is typically associated with the magnetite and (or) actinolite. Other secondary minerals such as fluorite, calcite, tourmaline, siderite, phlogopite or biotite, and monazite (?) occur in veinlets and disseminations in trace to minor amounts (<5 volume percent). Magnetite and hematite are the only iron bearing ore minerals. The iron bearing minerals commonly replace rhyolite porphyry in addition to forming veins, seams, and pods. Pyrite is sporadically present in trace quantities (<1 volume percent). Copper and copper iron sulfide minerals such as chalcopyrite, covellite, and chalcocite were recognized in trace amounts in two of fifteen drill holes.