Kenville Mine History and Future Potential

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This introduction focuses on the most recent work to detail the mining potential of the 257 Level of the Kenville Gold Mine located 8 kms west of the City of Nelson, British Columbia. There are six other historical levels within the Mine footprint only a brief examination of the next upper level up (the 275) was done during 2008. Access to the Mine is difficult due to hazardous conditions on all but the 257 Level. This level is fully open and ready for production activities.

Further exploration and development work is planned by the Company in 2009 and subsequent years to define highly mineralized sections within the Mine property. At the 257 portal area there is a series of fully operational mine buildings with very good road access, electricity, natural gas, and running water. In the building complex are all of the components to begin Mine operation. A fully functioning assay office and pilot plant/mill building are in place. New crushing, ball mill and flotation equipment is on site and requires only linking of these major parts to become operational.

The 257 Level is serviced with air that is supplied by a newer air compressor system and a complete backup compressor. It should be noted that the air system is for operations only. There is no requirement to ventilate the Mine as it has excellent natural air ventilation in place with the linking of the 5 upper Levels. The one lower Level (255) covers a large area which is completely filled with water that can be both used as a sump and pumped. The water can also be used for mine purposes at the outset and for an underground drilling settlement pond.

The Mine is also situated under Eagle Creek which can also supply water to exploration and development operations. In addition to 15 Crown Granted mineral claims, a significant area is also covered with current and valid staked mineral claims that extend the Company’s property north to the shores of and into the Kootenay River. This Mine complex has been in assorted forms of production since 1887.  Official government Minfile records shown that the Mine has produced 2,029 kilograms of gold, 861 kilograms of silver, 23.5 tonnes of lead, 15 tonnes of zinc, 1.6 tonnes of copper and 37 kilograms of cadmium between 1890 and 1954.  A total of 181,395 tonnes of material has been produced in the Mine with significant periods of production between 1890 to 1918 and 1945 to 1952.

Information on the Mine history has been collected from an assortment of government and non-government records which is listed in the references section. This Mine was the first underground lode gold mine in the Province of British Columbia and has a very interesting past. It has changed hands many times and is currently under strong control and ownership by Anglo Swiss Resources Inc.

A fully independent NI 43-101 Technical Report regarding the Crown Granted portion of the property suite was submitted in the early part of 2009 and is entitled the Technical Report on the Sand and Gravel Potential for the Kenville Gold Mine Property of 2 March, 2009.  During the field work portion of that project the southern high slopes of the property were explored to a limited degree and some excavator work conducted.

During the trenching for the sand and gravel study two locations were found to have quartz vein type bed rock at the base of the 3.0 - 4.3 metre (10 - 14 foot) deep holes. Samples of the rock were assayed and gold values recovered. These discoveries were in addition to the discovery of an old mine portal on the high slopes above the current Mine location. It was called the Jackpot Mine as it was on the Jackpot fraction, which is part of the Company’s Crown Granted mineral claim block.

The diamond drilling done by the Company in 2007 and 2008  when paired with the historical drilling also presents a strong exploration target for additional gold bearing veins on the west side of Eagle Creek. New cross section work completed in 2009 with the historical records resulted in the development of a plan for 12 additional potentially auriferous veins on the west side of Eagle Creek alone.  The new drilling by the Company ties in well with the historical drilling. High grade gold values have been found at depth on the veins now being described as the Eagle Vein system on the west side of the property.

Cross sectional analysis of the historical drilling done in and around the old Mine has also produced surprising results with new vein translations and the opportunity to drift into no less than 8 new vein traces off the main 180 cross cut drift on the 257 Level. At the current time only 2 vein traces have been exploited to varied degrees. While some of the exploitation is extensive the stopes are not fully mined and all 10 veins are open in all directions.

A significant amount of actual historical Mine production records have been located which includes maps, drill logs, production and core assays, cross sections and written text. These records date back to the early 1940’s and have provided an invaluable view into the Mine development. Where possible the steps of the original engineers were re-traced and developed a sound understanding of why the stopes were mined and the drifts pushed. The Chamber of Mines in Nelson holds records, maps and assorted area information materials.

The new assay program for this report was designed to both augment and validate the original records. The Mine is well known for its rich nugget like history and government records show the size and nature of the very high grade values that have been encountered in some stopes. It was also determined that there are geochemical differences in the vein systems which indicate that the emplacement process was from a series of hydrothermal events. These events may also be hosted from several different locations under and distal to the property. The existence of these potential host areas will only be determined with planned deep surface and underground drilling in 2009 and 2010 once permitting is obtained. All permit applications have been approved by the Provincial Government and commenced in the fall of 2009.