The Pakeagama Lake Rare Metals Property

Overview
In January of 1999, the Ontario Geological Survey ("OGS") published an article on a new discovery with potential for economic tantalum, cesium, rubidium and lithium mineralization at Pakeagama Lake, located about 170 km. north of Red Lake and 60 km to the southeast of the Houston Lake's Favourable Lake Rare Metals Property in northwestern Ontario. In late March of 1999, Houston Lake Mining Inc. ("Houston Lake") entered into an option agreement to earn a 100% interest in the 256 hectare property. Houston Lake has made all cash payments totalling $150,000, issued 200,000 common shares and is expected to complete all exploration expenditures by the end of June, 2001as required under the Pakeagama Lake Agreement. The option is subject to a 2.5 per cent N.S.R. (Net Smelter Royalty).

The area in the vicinity of Pakeagama Lake was mapped by Dr. Denver Stone of the OGS in the early 1990's. He identified a series of fertile granites and took a number of samples from the Pakeagama Lake pegmatite which contained highly anomalous tantalum, lithium and cesium values.

Based on this initial field work, Dr Fred Breaks of the OGS conducted three weeks of detailed mapping and sampling in 1998. Dr. Breaks identified a strongly zoned, complex petalite subtype pegmatite. The combination of size, accessibility and the presence of both geochemical indicators and rare metal ore minerals, provide the Property with high potential for economic rare metal mineralization.

GEOLOGY OF THE PAKEAGAMA LAKE PROPERTY
Property Geology

The property geology consists of foliated, coarse grained to pegmatitic muscovite-biotite granite (fertile granite) of the Pakeagama Lake Pluton which intrudes into the metavolcanic and metasedimentary rocks of the North Spirit Lake Greenstone Belt on the southern edge of the property. The Pakeagama Lake rare metal pegmatite is situated within the northwestern end of the Pakeagama Lake Pluton.

Size

The southeasterly trending pegmatite has an exposed strike length of 260 metres at surface and is open along strike in both directions. The width varies from 30 to 70 metres and appears to be widening at both extremities where a thin overburden masks the pegmatite.

Stripping work carried out last year by the Ontario Geological Survey expanded the width by another 20 metres. Previously inferred contacts have been reinterpreted as roof pendants (large inclusions of country rock) contained within the pegmatite mass. The presence of a tantalum bearing aplite on the shore of Pakeagama Lake suggests that the Pakeagama Lake rare metal pegmatite and associated rare metals mineralizing system has a strike length of 560 metres and is still open in both directions along strike.

The Pakeagama Lake pegmatite is the second largest complex petalite subtype pegmatite found in Ontario. Large size is an important determinant in the exploitation of rare metal deposits.

Zonation

The Pakeagama Lake rare metals pegmatite is a large, undeformed, steeply dipping, strongly zoned pegmatite mass. Five internal zones have been documented:

• Quartz-rich wall zone contains a mineralogy of quartz-montebrasite-potassium feldspar-muscovite-green tourmaline.
  
• Potassium feldspar-rich pegmatite zone displays a mineralogy composed of potassium feldspar-petalite*-quartz-green tourmaline.
  
• Spodumene-quartz-rich core zone contains spodumene-quartz-montebrasite-green tourmaline.
  
• Petalite*-potassium feldspar pegmatite zone is represented by a mineralogy of potassium feldspar-petalite*-quartz.
  
• Layered spodumene pegmatite-aplite zone contains a mineral assemblage of spodumene-albite-quartz.

* No primary petalite remains in the pegmatite system; Primary petalite has geochemically altered to spodumene and quartz.

Comparative Ore Model
Tanco Pegmatite Deposit

The Tanco deposit is wholly owned by Cabot Corporation, a major producer of tantalum capacitors. Pre-production reserves of 2.1 million tons grading 0.216% tantalum oxide, 7.3 million tons grading 2.76% lithium oxide, 0.3 million tons grading 23.3% cesium oxide, 0.4 million tons grading 0.20% beryllium oxide, and 0.5 million tons grading 2.50% rubidium oxide combine to make the Tanco deposit a world class rare metals pegmatite producer.

The Tanco rare metals pegmatite is located in the Bernic Lake pegmatite field in southeastern Manitoba. The Tanco pegmatite is a well zoned, complex type petalite subtype pegmatite that measures 1440 m by 820 m by 100 m. Tantalum production stems from two main areas: The Eastern Type Ore (ETO) and the Western Type Ore (WTO). The ETO consists of a banded aplite zone that measures 150 metres long and 20 metres thick. The banding is defined by cyclic variations in quantities of albite, quartz, tantalum oxides, muscovite, apatite, and tourmaline. The WTO consists of three main tantalum-bearing lithologies: (a) a banded aplite similar to the ETO, (b) high grade, poorly banded material (albite, muscovite, quartz, tantalum oxides, beryl, apatite, and tourmaline), and (c) concentrated bands of tantalum oxides and beryl along the margins of spodumene-quartz intergrowths (broken down from petalite).

Pakeagama Lake Economic Geology

The Pakeagama Lake pegmatite is a complex type petalite subtype pegmatite with well developed internal zones. Concentrations of rubidium (0.97 to 1.2%) and cesium (400 to 1349 ppm) are highly anomalous. A diagram of K/Rb versus Cs is useful in indicating economic potential of tantalum mineralization. Pakeagama Lake values plot within the Bernic Lake pegmatite group (the Tanco pegmatite) indicating similar rare metals concentration.

Seven economically important tantalum-rich minerals have been documented in electron microprobe analyses conducted at the Open University in the United Kingdom. They include: wodginite, manganotantalite, ferrotantalite, manganocolumbite, stibiotantalite, microlite, and ferrotapiolite. Dark brown cassiterite contains up to 5% tantalum oxide. A well-defined trend of chemical evolution from manganocolumbite to manganotantalite is similar to that of the Peerless pegmatite (part of the Tanco pegmatite) and indicates a high potential for tantalum-rich zones in the Pakeagama Lake pegmatite. Large, unbiased grab samples taken by the Ontario Geological Survey have returned values ranging from 300 to 700 g/t tantalum oxide.

Channel sampling of the 13 metre wide Northern Wall Zone of the Pakeagama Lake pegmatite returned 344 g/t tantalum oxide, 0.90 percent rubidium oxide, 1776 g/t cesium oxide, 68.9 g/t tin, 131.9 g/t niobium oxide, 1.34 percent lithium oxide, 25.9 g/t thallium, and 42.2 g/t gallium over a true width of 11 metres. The Pakeagama Lake Northern Wall Zone channel sample results compare favourably to Sons of Gwalia Limited’s Wodgina mine which is located in Western Australia. The Wodgina mine is a world-class tantalum-only producer containing 27 million tonnes averaging 420 g/t tantalum oxide.

Spodumene-quartz-rich core zone is ten metres wide and consists of 60% white to pink spodumene and 40% grey quartz. Half of the ten metre wide core zone has been channel sampled by the Ontario Geological Survey and yielded lithium oxide values between 4.33 and 4.79% in 1 metre channel samples.

The granitic country rock adjacent to and to the southeast of the Pakeagama Lake pegmatite displays a fibrous lithium-bearing amphibole which coincides with a significant lithium anomaly (295 to 843 ppm) for a distance of at least 120 metres southwest of and perpendicular to the pegmatite contact. A large, lithium-rich, blind pegmatite is interpreted to underlie the anomaly.