31C14SW2010 2.22989 ANGLESEA 010

Report On

Airborne Geophysical Survey

Tudor Township, Ontario

By

Fugro Airborne Surveys

For

Lydia Diamond Exploration of Canada Ltd.

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Index

Page

Introduction l

Property l

Location and Access 2

General Geology 2

Geophysical Survey 3

Appendix I

Report by Emily Farquhar

Fugro Airborne Survey Corp.

Mississauga, Ont. November 2000

Introduction

A close spaced (25 m) helicopter airborne geophysical survey was carried out

during September - October 2000 in the south-east part of Tudor Township and a second

area in the north-central part of Grimsthorpe Township. A total of 1,797.8 line kilmetres

were flown, of which 1,615 line kilometers are claimed in this report.

Property

The property in Tudor Township consisted of 21 claims containing 138 claim

units at the time of the airborne survey. The claims are numbered SO 1077074 to

1077075, SO 1077091 to 1077095 inclusive, SO 1184209 to 1184030, SO 1195071 to

1195072, SO 1195077, SO 1195165, SO 1195167, SO 1195169, SO 1195177 to

1195181 inclusive and SO 1195183 in the south east part of Tudor Township, Southern

Ontario Mining Division. They are held in the name of Lydia Diamond Exploration of

Canada Ltd.

The property in Grimsthorpe Township consisted of 9 claims containing 134

claim units at the time of the airborne survey. The claims are number SO 1235047 to

1235052 inclusive and SO 1235054 to 1235056 inclusive in the north central part of

Grimsthorpe Township, Southern Ontario Mining Division. They are held 50^o in the

name of Emilia, Princess von Anhalt and 50*^o in the name of Jurgen Freidman Prinz von

Anhalt.

Location and Access

The Tudor property is located about 20 km north of Madoc, Ontario. Madoc lies

at the junction of Highways 7 and 62. Highway 7 runs east from Toronto through

Peterborough to Ottawa; Highway 62 runs north from Belleville to Bancroft. Madoc is

about 41 km north of Belleville. Access to the property is by secondary township roads

which run east from Highway 62.

The Grimsthorpe Township property is located about 10 km east of Gilmour,

Ontario. Gilmour lies east on Highway 62 on the Weslemkoon Lake road about halfway

between Madoc and Bancroft. Access to the property is by a forest access road which

runs from the Weslemkoon Lake Road through the center of the property.

Property locations are shown on the enclosed map.

General Geology

The property is underlain by a volcanic to sedimentary sequence intruded by

mafic to granitic rocks. Metamorphic grade is generally high. The area is part of the

Proterozoic Grenville province of the Precambrian shield. In general the east part of the

property is underlain by mafic intrusive rocks of the Lingham Lake complex with mafic

volcanics, to the west and south, with a narrow band of felsic volcanics followed by

carbonate metasediments further west.

There has been previous exploration in the area for gold and lead-zinc.

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Geophysical Survey

The airborne survey was carried out by Fugro Airborne Survey Corp. of

Mississauga, Ontario. Details of the survey are given in a report by Emily Farquhar in

Appendix I. A total of 1,797.8 line kilometers were flown at a cost of 555,453.14 . This

was reduced to 1,615 line kilometers with a cost of 549,814.68. The reduction is for a

small amount of the airborne survey previously reported on the property of Saxongate

Ltd., and for areas overflown , but not owned which have been removed from the survey

plans.

Appendix I

Report by Emily FarquharFugro Airborne Survey Corp.

Mississauga, Ont., November 2000

Contract # 2034

Detailed Helicopter Magnetic 4 VLF Surveyfor

Lydia Consolidated Diamond Mines of Canada Ltd.

Tudor and Grimsthorpe Block, Ontario

NTS 13C/12, 13, 14

Fugro Airborne Surveys Corp.Mississauga, Ontario November, 2000

SUMMARY

This report describes the logistics and results of a helicopter-borne magnetic/VLF geophysical survey carried out for Lydia Consolidated Diamond Mines of Canada, over a property located near Madoc, Ontario. Total coverage of the survey blocks amounted to 1,797.8 km. The survey was flown from September 24th to October 1st, 2000.

The purpose of the survey was to detect zones of conductive mineralization and to provide information that could be used to map the geology and structure of the survey area. This was accomplished by using a High-Sense MiniMag system with a GFCS II flight control system, supplemented by a high sensitivity cesium magnetometer and a four-channel VLF receiver. The information from these sensors was processed to produce maps that display the magnetic and conductive properties of the survey area. A GPS electronic navigation system, utilizing a satellite link, ensured accurate positioning of the geophysical data with respect to the base maps. Visual flight path recovery techniques were used to confirm the location of the helicopter where visible topographic features could be identified on the ground.

TABLE OF CONTENTS

1. INTRODUCTION..........................................................................................................1.1

2. SURVEY EQUIPMENT................................................................................................2.1Geophysical Flight Control System...............................................................................2.1Magnetometer.............................................................................................................. 2.1Magnetic Base Station..................................................................................................2.1VLFSystem..................................................................................................................2.2Radar Altimeter ............................................................................................................2.2Barometric Pressure and Temperature Sensors ..........................................................2.2Digital Data Acquisition System....................................................................................2.2Video Flight Path Recording System ............................................................................2.2Navigation (Global Positioning System)........................................................................2.3Field Workstation .........................................................................................................2.3

3. PRODUCTS AND PROCESSING TECHNIQUES........................................................3.1Base Maps ...................................................................................................................3.1Total Magnetic Field .....................................................................................................3.2Magnetic Derivatives (optional) ....................................................................................3.3VLF..............................................................................................................................3.4Contour and Colour Map Displays................................................................................3.4Digital Terrain...............................................................................................................3.4

4. SURVEY RESULTS.....................................................................................................4.1General Discussion ......................................................................................................4.1Magnetics.....................................................................................................................4.1VLF..............................................................................................................................4.1

5. CONCLUSIONS AND RECOMMENDATIONS .............................................................5.1

APPENDICES

A. List of PersonnelB. Statement of CostC. Background InformationD. Archive Description

-1.1 -

1. INTRODUCTION

A MiniMag magnetic/VLF survey was flown for Lydia Consolidated Diamond Mines of

Canada, from September 24th to October 1st, 2000, over two survey blocks located

near Madoc, Ontario. The survey areas can be located on NTS map sheets 13C/12, 13,

14.

Survey coverage consisted of approximately 1,797.8 line-km, including tie lines. Flight

lines were flown in an azimuthal direction of N450E for the Tudor Block and N200W for the

Grimsthorpe Block with a line separation of 25 metres.

The survey employed the MiniMag system. Ancillary equipment consisted of radar and

barometric altimeters, video camera, a VLF receiver, and an electronic navigation system.

The instrumentation was installed in an AS350B3 helicopter C-GECL which was provided

by Questral Helicopters. The helicopter flew at an average airspeed of 100 km/h with a

magnetometer sensor height of approximately 25 m.

Section 2 provides details on the survey equipment, the data channels, their respective

sensitivities, and the navigation/flight path recovery procedure.

In some portions of the survey area, strong winds permitted excessive bird swinging. This

problem gave rise to aerodynamic noise levels that are slightly higher than normal on

some lines. Where warranted, refiights were carried out to minimize these adverse

effects.

-2.1 -

2. SURVEY EQUIPMENT

This section provides a brief description of the geophysical instruments used to acquire

the survey data and the calibration procedures employed.

Geophysical Flight Control System

Manufacturer: Fugro Airborne Surveys Type: HS-GFCS-II

The HS-GFCS-II controls, monitors and records the operation of all the geophysical and

ancillary sensors. Input from the various sensors is monitored every 0.01 seconds for

precise coordination of geophysical and positional measurements. GPS positional

coordinates and terrain clearance is presented to the pilot by means of a LCD touch

screen display and optional pilot indicator. The magnetometer response, 4th difference

and altimeter profile, plus profiles of the radiometric windows and VLF are also shown

on the LCD touch screen display for real-time monitoring of equipment performance.

Magnetometer

Model: Geometrics G822Type: Optically pumped cesium vapourSensitivity: 0.01 nTSample rate: 10 per second

The Larmor frequency output was processed by the MiniMag magnetometer counter

board that provides a resolution, without filtering, of 10 (ten) times per second (in a

magnetic field of 50,000 nT this resolution is equivalent to 0.005 nT).

Magnetic Base Station

Model: GeometricsType: Digital recording cesium vapourSensitivity: 0.01 nTSample rate: 1 per second

A digital recorder is operated in conjunction with the base station magnetometer to record

the diurnal variations of the earth's magnetic field. The clock of the base station is

synchronized with that of the airborne system to permit subsequent removal of diurnal

drift.

-2.2-

VLF System

Manufacturer: Herz Industries Ltd. Type: Totem-2A Sensitivity: 0.1 "/oStations: Seattle, Washington; NLK, 24.8 kHz

Cutler, Maine; NAA, 24.0 kHz

The VLF receiver measures the total field and vertical quadrature components of the secondary VLF field. Signals from two separate transmitters can be measured simultaneously.

Radar Altimeter

Manufacturer: TerraModel: TRA 3500ASensitivity: 0.3 m

At heights above 765 m (2500') the return signal may be lost and the recorded values drop to some meaningless value. The radar altimeter was mounted on the helicopter.

Barometric Pressure and Temperature Sensors

Manufacturer: RosemountModel: 1241M B2Accuracy: 5.1 ft @ s.l., 6.9 ft @ 10,000 ft

Digital Data Acquisition System

Manufacturer: Fugro Airborne SurveysModel: MiniMag SystemRecorder: Flashcard and internal hard drive

The output data is recorded digitally on a flashcard and internal hard drive ten times per second and then downloaded to the field workstation PC at the survey base for verification, backup and preparation of in-field products.

Video Flight Path Recording System

Type: Panasonic VHS Colour Video Camera (NTSC) Model: AG 2400/WVCD132

Information overlain on the video image includes flight number, line number, DOS time, OPS week second, and latitude and longitude. The videotapes were manually labeled with the flight number and date for external identification.

-2.3-

Navigation (Global Positioning System)

Airborne Receiver:

Model: Novatel 3751Type: twelve-channelAccuracy: Manufacturer's stated accuracy is better than 10 metres

real-timeThe GPS airborne receiver was mounted on the towed bird.

Base Station:

Model: NovAtel3151R Type: twelve-channel L1 external GPScard Accuracy: 0.75 metres real-time differential

2 metres post-processed

Although the base station receiver is able to calculate its own latitude and longitude, a higher degree of accuracy can be obtained if the reference unit is established on a known benchmark or triangulation point. For this survey, the GPS station was located at latitude

N 0440 32' 58.1931", longitude W 0770 19' 53.1481" at an elevation of 140.02 m a.s.l. The GPS records data relative to the WGS84 ellipsoid, which is the basis of the revised North American Datum (NAD83). Conversion software is used to transform the WGS84 coordinates to the NAD27 (Manitoba SOnt) system displayed on the base maps.

Field Workstation

A PC is used at the survey base to verify data quality and completeness. Flight data is transferred to the PC hard drive to permit the creation of a database using a proprietary

software package. This process allows the field operators to display both the positional

(flight path) and geophysical data on a screen or printer.

-3.1 -

3. PRODUCTS AND PROCESSING TECHNIQUES

Table 3-1 lists the maps and products that have been provided under the terms of the survey agreement. Other products can be prepared from the existing dataset, if requested. These include magnetic enhancements or derivatives, digital terrain or ternary maps. Most parameters can be displayed as contours, profiles, or in colour.

Base Maps

Base maps of the survey area have been produced from published topographic maps. These provide a relatively accurate, distortion-free base which facilitates correlation of the navigation data to the UTM grid. The original topographic maps are scanned to a bitmap format and combined with geophysical data for plotting the final maps. All maps are created using the following parameters:

Projection Description:

Datum: NAD27 (Manitoba b Ontario)Ellipsoid: Clarke 1866Projection: UTM (Zone: 18)Central Meridian: 750WFalse Northing: OFalse Easting: 500000Scale Factor: 0.9996WGS84 to Local Conversion: MolodenskyDatum Shifts: DX: 9 DY: -157 DZ: -184

-3.2-

Table 3-1 Survey Products

1. Final Transparent Maps (+S prints) @ 1:5,000

Total magnetic field Filtered total field VLF

2. Final Transparent Maps (+S prints) @ 1:10,000

Total magnetic field Filtered total field VLF

3. Colour Maps (2 sets) @ 1:5,000

Total magnetic field Filtered total field VLF

4. Colour Maps (2 sets) @ 1:10,000

Total magnetic field

5. Additional Products

Digital XYZ archive in Geosoft format (CD-ROM)

Digital grid archives in Geosoft format (CD-ROM)

Survey report (3 copies) Flight path videocassettes

Note: Other products can be produced from existing survey data, if requested.

Total Magnetic Field

Diurnal activity recorded at the base station was time-stamped with the GPS week

seconds. Spikes are removed and interpolated to 0.1 seconds before being merged with

the airborne data. The diurnal is subtracted from the raw total field magnetics.

Errors in time caused by a data transfer delay in the acquisition system is commonly called

the lag. The difference in time between prominent peaks flown in opposite directions is

twice the lag, and the lag correction is therefore one half of this time difference.

Total field magnetic data varies from line to line due to several factors, such as diurnal

activity, lag and difference in terrain clearance. Even after diurnal and lag corrections,

data will still have some residual errors left in it. Those residuals combined with level

errors caused by survey altitude differences between lines will make the magnetic data still

unsuitable for final presentation. To correct the problem, control lines, perpendicular to

-3.3-

traverse lines, are always flown during a survey, and are to be used to minimize line to line

level noise.

The effective wavelength of control line correction is twice the control line spacing,

because the corrections for points in between are linearly interpolated from the corrections

calculated at the two intersections. Any higher order corrections of wavelength less than

the control line spacing is not possible with the control line leveling technique.

Microleveling is an enhancement leveling technique mostly suited in corrections with

wavelength less than control line spacing where normal control line leveling is no longer

effective. It is essentially a 'decorrugation' filtering process, which seeks to remove level

noise. A decorrugation filter as applied to grids is usually elliptically shaped, and

orientated with major axis along the traverse line direction. The length of its major axis is

in the order of control line spacing, whilst the length of its minor axis is in the order of twice

traverse line spacing. Any small features, hopefully mostly noise, which can be enclosed

by the decorrugation filter, will be removed. The microleveling corrections calculated from

the grids were 'threaded' into a database channel, low-pass filtered, and applied to profile

data.

Since microleveling does not have the ability to distinguish valid magnetic anomalies from

noise features of similar wavelength, it should be used with extreme caution. Microleveling

can remove noise as well as valid signal. To prevent unwarranted data distortion,

microleveling corrections are kept to a bare minimum. However, without microleveling, low

level noise features are still quite evident in shaded relief image of the total field

magnetics, or the calculated second vertical derivative. Therefore, the tradeoff between

data quality and very minor reduction in signal is necessary through microleveling, which

has become a commonly used standard processing procedure in geophysical exploration

industry.

Magnetic Derivatives (optional)

The total magnetic field data can be subjected to a variety of filtering techniques to yield

maps of the following:

enhanced magneticshorizontal derivativesvertical derivativesreduction to the pole/equatormagnetic susceptibility with reduction to the pole

upward/downward continuations

analytic signal

All of these filtering techniques improve the recognition of near-surface magnetic bodies,

with the exception of upward continuation. Any of these parameters can be produced on

request. Fugro's proprietary enhanced magnetic technique is designed to provide a

general "all-purpose" map, combining the more useful features of the above parameters.

-3.4-

VLF

The VLF total field data is digitally filtered to autonormalize the response and to remove long wavelengths such as those caused by variations in the transmitted field strength. Further high frequency suppression results in an effective band pass filter for the final display of the total field VLF. The total field response from the Line (NAA) channel of the VLF have been filtered in this way.

Contour and Colour Map Displays

The geophysical data is interpolated onto a regular grid using a modified Akima spline technique. The resulting grid is suitable for generating contour maps of excellent quality. The grid cell size is usually 25 07o of the line interval.

Colour maps are produced by interpolating the grid down to the pixel size. The parameter is then incremented with respect to specific amplitude ranges to provide colour "contour" maps. Colour maps of the total magnetic field are particularly useful in defining the lithology of the survey area.

Digital Terrain

The radar altimeter values were subtracted from the differentially corrected GPS-Z values, which were transformed to the local datum, to produce profiles of the height above mean sea level along the survey lines. These values were gridded to produce contour maps showing approximate elevations within the survey blocks. The resulting digital terrain contours were compared against published topographic maps. The data was manually adjusted to remove differences between the two. The data was then subjected to a microleveling algorithm to remove any remaining small line-to-line discrepancies.

The accuracy of the elevation calculation is directly dependent on the accuracy of the two input parameters. The altimeter value may be erroneous in areas of heavy tree cover, where the device reflects the distance to the tree canopy rather than the ground. The GPS-Z value is primarily dependent on the number of available satellites. Although post processing of GPS data will yield X and Y accuracy's in the order of 5 metres, the accuracy of the Z value is usually much less, sometimes in the 20 metre range. Further inaccuracies may be introduced during the interpolation and gridding process.

Because of the inherent inaccuracies of this method, no guarantee is made or implied that the information displayed is a true representation of the height above sea level. Although this product may be of some use as a general reference, THIS PRODUCT MUST NOT BE USED FOR NAVIGATION PURPOSES.

-4.1 -

4. SURVEY RESULTS

General Discussion

The survey results are presented on 5 separate map sheets for each parameter at a scale of 1:5,000.

Magnetics

A Geometrics cesium vapour magnetometer was operated at the survey base to record diurnal variations of the earth's magnetic field. The clock of the base station was synchronized with that of the airborne system to permit subsequent removal of diurnal drift

The total magnetic field data have been presented as contours on the base maps using a contour interval of 2 nT where gradients permit. The maps shows the magnetic properties of the rock units underlying the survey area.

If a specific magnetic intensity can be assigned to the rock type which is believed to host the target mineralization, it may be possible to select areas of higher priority on the basis of the total field magnetic data. This is based on the assumption that the magnetite content of the host rocks will give rise to a limited range of contour values that will permit differentiation of various lithological units.

The magnetic results, in conjunction with the other geophysical parameters, have provided valuable information that can be used to effectively map the geology and structure in the survey areas.

VLF

VLF results were obtained from the transmitting stations at Cutler, Maine (NAA -24.0 kHz) and Seattle, Washington (NLK - 24.8 kHz). The VLF parameter does not normally provide the same degree of resolution available from helicopter frequency domain EM data. Closely spaced conductors, conductors of short strike length or conductors that are poorly coupled to the VLF field, may escape detection with the VLF method. Erratic signals from the VLF transmitters can also give rise to strong, isolated anomalies which should be viewed with caution. Regardless of these limitations, however, the VLF results can provide valuable additional information, particularly within the more resistive portions of the survey area. The VLF method could probably be used as a follow-up tool in most areas, although its effectiveness will be somewhat limited in areas of moderate to high conductivity. The filtered total field VLF contours from Cutler, Maine (NAA 24.0 kHz), the Line VLF channel are presented on the base map(s) with a contour interval of one percent.

-5.1 -

5. CONCLUSIONS AND RECOMMENDATIONS

This report describes the equipment, procedures and logistics of the survey.

It is recommended that image processing of existing geophysical data be considered, in

order to extract the maximum amount of information from the survey results. Current

software and imaging techniques often provide valuable information on structure and

lithology, which may not be clearly evident on the contour and colour maps. These

techniques can yield images which define subtle, but significant, structural details.

Respectfully submitted,

FUGRO AIRBORNE SURVEYS CORP.

Emily FarquharManager, Data Processing and Interpretation

APPENDIX A

LIST OF PERSONNEL

The following personnel were involved in the acquisition, processing, interpretation and presentation of data, relating to a MiniMag airborne geophysical survey carried out for Lydia Consolidated Diamond Mines of Canada, near Madoc, Ontario.

Dave Miles Manager, Helicopter OperationsEmily Farquhar Manager, Data Processing and InterpretationGlen Meerburg Field GeophysicistRoger Morrow Pilot (Questral Helicopters Ltd.)Gordon Smith Data Processing SupervisorElizabeth Bowslaugh Computer ProcessorLyn Vanderstarren Drafting SupervisorAlbina Tonello Secretary/Expediter

The survey consisted of 1,797.8 km of coverage, flown from September 24th to October 1st, 2000.

All personnel are employees of Fugro Airborne Surveys, except for the pilot who is an employee of Questral Helicopters Ltd.

APPENDIX B

STATEMENT OF COST

Allocation of Costs

- Data Acquisition (8007o)- Data Processing (1007o)- Interpretation, Report and Maps (1007o)

-Appendix C.1 -

APPENDIX C

Magnetics

Total field magnetics provides information on the magnetic properties of the earth materials in the survey area. The information can be used to locate magnetic bodies of direct interest for exploration, and for structural and lithological mapping.

The total field magnetic response reflects the abundance of magnetic material, in the source. Magnetite is the most common magnetic mineral. Other minerals such as ilmenite, pyrrhotite, franklinite, chromite, hematite, arsenopyrite, limonite and pyrite are also magnetic, but to a lesser extent than magnetite on average.

In some geological environments, an EM anomaly with magnetic correlation has a greater likelihood of being produced by sulphides than one that is non-magnetic. However, sulphide ore bodies may be non-magnetic (e.g., the Kidd Creek deposit near Timmins, Canada) as well as magnetic (e.g., the Mattabi deposit near Sturgeon Lake, Canada).

Iron ore deposits will be anomalously magnetic in comparison to surrounding rock due to the concentration of iron minerals such as magnetite, ilmenite and hematite.

Changes in magnetic susceptibility often allow rock units to be differentiated based on the total field magnetic response. Geophysical classifications may differ from geological classifications if various magnetite levels exist within one general geological classification. Geometric considerations of the source such as shape, dip and depth, inclination of the earth's field and remanent magnetization will complicate such an analysis.

In general, mafic lithologies contain more magnetite and are therefore more magnetic than many sediments which tend to be weakly magnetic. Metamorphism and alteration can also increase or decrease the magnetization of a rock unit.

Textural differences on a total field magnetic contour, colour or shadow map due to the frequency of activity of the magnetic parameter resulting from inhomogeneities in the distribution of magnetite within the rock, may define certain lithologies. For example, near surface volcanics may display highly complex contour patterns with little line-to-line correlation.

Rock units may be differentiated based on the plan shapes of their total field magnetic responses. Mafic intrusive plugs can appear as isolated "bulls-eye" anomalies. Granitic intrusives appear as sub-circular zones, and may have contrasting rings due to contact metamorphism. Generally, granitic terrain will lack a pronounced strike direction, although granite gneiss may display strike.

Linear north-south units are theoretically not well-defined on total field magnetic maps in equatorial regions due to the low inclination of the earth's magnetic field. However, most

-Appendix C.2 -

stratigraphic units will have variations in composition along strike that will cause the units to appear as a series of alternating magnetic highs and lows.

Faults and shear zones may be characterized by alteration that causes destruction of magnetite (e.g., weathering) which produces a contrast with surrounding rock. Structural breaks may be filled by magnetite-rich, fracture filling material as is the case with diabase dikes, or by non-magnetic felsic material.

Faulting can also be identified by patterns in the magnetic total field contours or colours. Faults and dikes tend to appear as lineaments and often have strike lengths of several kilometres. Offsets in narrow, magnetic, stratigraphic trends also delineate structure. Sharp contrasts in magnetic lithologies may arise due to large displacements along strike- slip or dip-slip faults.

VLF

VLF transmitters produce high frequency uniform electromagnetic fields. However, VLF anomalies are not EM anomalies in the conventional sense. EM anomalies primarily reflect eddy currents flowing in conductors that have been energized inductively by the primary field. In contrast, VLF anomalies primarily reflect current gathering, which is a non-inductive phenomenon. The primary field sets up currents which flow weakly in rock and overburden, and these tend to collect in low resistivity zones. Such zones may be due to massive sulphides, shears, river valleys and even unconformities.

The VLF field is horizontal. Because of this, the method is quite sensitive to the angle of coupling between the conductor and the transmitted VLF field. Conductors which strike towards the VLF station will usually yield a stronger response than conductors which are nearly orthogonal to it.

The Herz Industries Ltd. Totem VLF-electromagnetometer measures the total field and vertical quadrature components. The total field yields peaks over VLF current concentrations whereas the quadrature component tends to yield crossovers. Both appear as traces on the analog profile records.

APPENDIX D

ARCHIVE DESCRIPTION

This CD-ROM contains final data archives of an airborne survey conducted Fugro Airborne Surveys on behalf of Lydia Conslidated Diamond Mines of Canada in Madoc, Ontario during September to October, 2000.

Fuqro Job # 2034.

For each survey block, Tudor and Grimsthorpe, the archives contain 3 directories.

1. Profile data in Geosoft ASCII XYZ format, along with channel header description in the file.

Area.xyz

Profile data in Geosoft GOB format.

Area.gdb

2. Grids: Grids in Geosoft format for the following parameters:

Magnetic Total FieldVLF Total Field for Cutler, Maine transmitter

3. Vectors: Vector files in DXF format of:

Flight Path Contours

Report in Microsoft Word 97: This logisitics report is found in the main directory \2034

Projection Description:Datum: NAD27 (Manitoba 8^ Ontario)Ellipsoid: Clark 1866Projection: UTM (Zone: 18)Central Meridian: 750WFalse Northing: OFalse Easting: 500000Scale Factor: 0.9996WGS84-Local Conversion :MolodenskyDatum Shifts: DX: 9 DY: -157 DZ: -184

ONTARIO MINISTRY OF NORTHERN DEVELOPMENT AND MINES

Work Report Summarv

Transaction No: W0290 00284 Status:

Recording Date: 2002-FEB-14 Work Done from:

Approval Date: 2002-MAY-15 to:

Client(s):

300883 PRINZ, VON ANHALT

300933 PRINCESS, VON ANHALT

392675 LYDIA DIAMOND EXPLORATION OF CANADA

Survey Type(s):

AMAG AVLF

APPROVED (D)

2000-SEP-24

2002-FEB-11

LTD.

Work Report Details:

Claim*

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1077074

1077091

1077092

1077093

1077094

1077095

1184029

1184030

1195071

1195072

1195077

1195165

1195167

1195169

1195177

1195178

1195179

1195180

1195181

1195183

1235050

1235051

1235054

1235055

1235056

Perform

5325

S650

51,300

55,200

S325

55,200

53,250

52,600

3650

55,200

53,900

53,900

53,900

5650

31,300

31,300

31,300

S650

51,300

5650

52,608

51,955

51,304

51,955

31,304

552,676

External Credits:

Perform Approve

5325

3650

51,300

55,200

5325

55,200

53,250

52,600

5650

55,200

53,900

53,900

33,900

S650

51,300

51,300

31,300

S650

31,300

5650

52,608

51,955

51,304

31,955

31,304

352,676

SO

Applied

5325

5650

51,300

55,200

5325

55,200

53,250

32,600

S650

55,200

SO

53,900

53,900

5650

51,300

51,300

51,300

5650

31,300

5650

52,608

31,955

31,304

51,955

51,304

348,776

Applied Assign Approve Assign Approve

S325

5650

51,300

55,200

S325

55,200

53,250

32,600

5650

55,200

SO

33,900

S3, 900

S650

51,300

31,300

31,300

S650

51,300

3650

52,608

51,955

51,304

31,955

51,304

548,776

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soSO

SO

so50

so50

50

SO

53,900

sosososo so so so50

50

soSO

50

50

SO

53,900

Due Date

2003-NOV-16

2003-MAR-27

2003-MAR-27

2003-MAR-27

2003-MAR-27

2003-MAR-27

2003-JUL-17

2003-JUL-17

2003-MAR-27

2003-MAR-27

2007-DEC-29

2003-MAR-27

2003-MAR-27

2003-MAR-27

2003-MAR-27

2003-MAR-27

2003-MAR-27

2003-MAR-07

2004-MAR-07

2003-AUG-12

2003-AUG-28

2003-AUG-28

2003-AUG-28

2003-AUG-28

2003-AUG-28

31C14SW2010

to

22989

ANGLESEA

Reserve:

53,900 Reserve of Work

53,900 Total

Status

Remaining

nf rlaim is h

Report*: W0290. 00284

aspd on information r.urrpntlv on rer.nrrl

VD O O

2002-May-24 16:11 Armstrong-d Page 1 of 1

Ministers du Developpement du Nord et des Mines

Ministry ofNorthern Developmentand Mines

Date:2002-MAY-15

LYDIA DIAMOND EXPLORATION OF CANADALTD.8 KING STREET EAST, SUITE 1704TORONTO, ONTARIOM5C1B5 CANADA

OntarioGEOSCIENCE ASSESSMENT OFFICE 933 RAMSEY LAKE ROAD, 6th FLOOR SUDBURY, ONTARIO P3E6B5

Tel: (888)415-9845 Fax:(877)670-1555

Dear Sir or Madam

Submission Number: 2.22989 Transaction Number(s): W0290.00284

Subject: Deemed Approval of Assessment Work

We have approved your Assessment Work Submission with the above noted Transaction Number(s) as per6(7) of the Assessment Work Regulation. Only eligible assessment work is deemed approved for assessment workcredit. The attached Work Report Summary indicates the results of the approval.

NOTE: The report has not been reviewed for technical deficiencies and reported expenses were not evaluated based on the Industry Standard.

At the discretion of the Ministry, the assessment work performed on the mining lands noted in this work report may be subject to inspection and/or investigation at any time.

If you have any question regarding this correspondence, please contact LUCILLE JEROME by email at lucille.jerome@ndm.gov.on.ea or by phone at (705) 670-5858.

Yours Sincerely,

Ron Gashinski

Senior Manager, Mining Lands Section

Gc: Resident Geologist

Robert Allan Macgregor (Agent)

Assessment File Library

Von Anhalt Prinz (Claim Holder)

Von Anhalt Princess (Claim Holder)

Lydia Diamond Exploration Of Canada Ltd. (Claim Holder)

Lydia Diamond Exploration Of Canada Ltd. (Assessment Office)

Visit our website at http://www.gov.on.ca/MNDM/LANDS/mlsmnpge.htm Page: 1 Correspondence 10:17055

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MINING LAND TENURE

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TOWNSHIP/AREA

TUDOR

10:03h Eastern

PLAN

M-0156

ADMINISTRATIVE DISTRICTS /DIVISIONSMining Division Southern Ontario

Land Titles'Reglstry Division HASTINGS

Ministry of Natural Resources District BANCROFT

TOPOGRAPHIC

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LAND TENURE WITHDRAWALS

IMPORTANT NOTICES

LAND TENURE WITHDRAWAL DESCRIPTIONS

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MAP

Date ; Time of Issue May 14 2002

TOWNSHIP/AREA

GRIMSTHORPE

10:31h Eastern

PLAN

M-0097

ADMINISTRATIVE DISTRICTS ; DIVISIONSMining Division! Southern Ontario

Land Titles/Reg

Ministry oINaiu

TOPOGRAPHIC

try Division

l Resources District

HASTINGS

BANCROFT

LAND TENURE

G Q

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LAND TENURE WITHDRAWALS

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IMPORTANT NOTICES

LAND TENURE WITHDRAWAL DESCRIPTIONS

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296SOO E

4-

291500 E

4-

29BSOO E 299500 E 300500 E 301500 E 302500 E

4-

x*?^ \ [\ -. N..* A

) t 'i *- '

f' **. f s* ^** ^ . r!fc -f •S,- * *- < ^| -JC'

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296500 E 297500 E Z98SOO E 293500 E

4-

300500 E

4-

301500 E

4

302500 E

TECHNICAL SUMMARY

Novigotion , . . . . , . . . . . . . Differentially-corrected GPSData reduction grid interval . . . . 5 metresTerrain clearance . , , , , , . . . . Helicopter 55 m

Magnetometer, VLF receiver 25 m Data sampling interval , . , . . . . 0.1 secondMagnetometer / sensitivity . . . . . Cesium / 0.01 nTVLF receiver / sensitivity . . . . . Herz 2A X 1SSData acquisition system . . . . . . HS—GFCS II Minimag

FLIGHT LINES

Flight number Flight direction

Flight line number 11020

'—— Reflight Number——— Line Number——— Area Number

Fiducials identified on profiles

TOTAL MAGNETIC FIELD CONTOURS

200 nT

50 nT

. . . . . . . . . 10 nT

. . . . . . . . . 2 nT

- - - - - * magnetic low

Magnetic inclination within the survey area: 72 degrees N Magnetic declination within the survey area: 13 degrees W

LOCATION MAP7T30'W

44"45'N

NTS: 31C/12.13.14 UTM ZONE: 18 NAD27

SCALE: 1:250.000

LYDIA CONSOUDATED DIAMOND MINES OF CANADA LTD

TUDOR BLOCK, ONTARIO

TOTAL MAGNETIC FIELD

HS-GFCS II Minimog

DATE: OCTOBER. 2000

NTS: 31C/12.13

JOB: 2034

GEOPHYSICIST:

SHEET: 1

Fugro Airborne Surveys

0.5 1.0 Km

Scale 1:10 0000.5 Mi

FUGRO AIRBORNE SURVEYS

31C14SW2010 2.22989 ANGLESEA 220

z

g

296500 E

4-

291SOO E 298500 E 299500 E 300500 E 301500 E

+

302500 E

SK i* ^ ,k^as-^i w ,!Y^\

\ ~ /\^Y?.i.,' y* ^ 'i '

r*'*'~ / i --' i ;' JMJ) . i j ' , . , .f J

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\ -;):

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,:0^*'' *.r "**/

296500 EZ97SOO E

296500 EZ99SOO E

+

300500 E 301500 E 302500 E

o o o

TECHNICAL SUMMARY

Navigation . . . . . . . . . . . . . Differentially-corrected GPSData reduction grid interval . , . . 5 metresTerrain clearance . . . . . . . . . . Helicopter 55 m

Magnetometer, VLF receiver 25 m Data sampling interval . . . . . . . 0.1 secondMagnetometer f sensitivity . . . . , Cesium / 0.01 nTVLF receiver f sensitivity . . . . . Herz 2A X 15!Data acquisition system . . . . . . HS-GFCS li Minimag

FLIGHT LINES

Flight number Flight direction

Flight line number 11020

'——— Reflight Number——— Line Number——— Area Number

Fiducials identified on profiles

VLF CONTOURSFrequency response

of VLF-EM filter

Contours in percent

—————10—————

————— 2 —————

STATION

NAA Cutler (Maine) - 24.0 kHz Cycles/metre

LOCATION MAP77-30'W

44'45'N

NTS: 31C/12.1J.U UTM ZONE: 18 NA027

SCALE: 1:250.000

LYDIA CONSOLIDATED DIAMOND MINES OF CANADA LTD.

TUDOR BLOCK, ONTARIO

FILTERED VLFHS-GFCS II Minimag

DATE: OCTOBER, 2000

NTS: 31C/12.13

JOB: 2034

GEOPHYSICIST:

SHEET: 1

Fugro Airborne Surveys

Scale 1:10 000 0.5 Mi

FUGRO AIRBORNE SURVEYS

31C14SW2010 2.22989 ANGLESEA230

3D7DQD E aoflooo E 309000 E 310000 E 311000 E

r-t-

4.,.,

3070DO E

4-

•H-

+

303000 E 309QOQ E 31DDOO E 311DDD E 31200D E

TECHNICAL SUMMARY

Navigation . . . . . . . . . . . . . Differentially-corrected GPSData reduction grid interval . . . , 5 metresTerrain clearance . . . . . . . . . . Helicopter 55 m

Magnetometer, VLF receiver 25 mData sampling interval . . . . . . . 0.1 secondMagnetometer / sensitivity . . . . . Cesium / 0.01 nTVLF receiver / sensitivity . . . . . Herz 2A / ^%Data acquisition system . . . . . . HS-GFCS II Minlmag

FLIGHT LINES

Flight number Flight direction

Flight line number 11020

'——— Reflight Number——— Line Number——— Area Number

Fiducials identified on profiles

TOTAL MAGNETIC FIELD CONTOURS

200 nT

50 nT

10 nT

2 nT

magnetic low

Magnetic inclination within the survey area: 72 degrees N Magnetic declination within the survey area: 13 degrees W

LOCATION MAP

44'45'N

NTS: 310/12,13,14. UTM ZONE: 18 NAD27

SCALE: 1:250,000

DI

SO

LYDIA CONSOLIDATED DIAMOND MINES OF CANADA LTD.

GRIMSTHORPE BLOCK, ONTARIO

TOTAL MAGNETIC FIELDHS-GFCS II Minimag

DATE: OCTOBER, 2000

NTS: 31C/U

JOB: 2034

GEOPHYSICIST:

^HEET: 1

Fugro Airborne Surveys

lB [n

Kl rf* O

0.5 1.0 Km

Scale 1:10 0000.5 Mi

FUGRO AIRBORNE SURVEYS

toUlo

307000 E 308000 E 309000 E 310000 E 311000 E 312000 E

d^li@* eO\ ?* ^'^^T

j.'"•M* •fft*r*ijfiat'ttf M ~- M(|p*m(*iiqMM*i- -

LM^lr

307000 E 306000 E 309000 E 310000 E 311000 E 312000 E

TECHNICAL SUMMARY

Navigation . . . . . . . . . . . . . Differentially-corrected GPSData reduction grid interval . . . . 5 metresTerrain clearance . . . . . . . . . . Helicopter 55 m

Magnetometer, VLF receiver 25 m Data sampling interval . . . . . . . 0.1 secondMagnetometer f sensitivity. . . . . Cesium f 0.01 nTVLF receiver f sensitivity . . . . . Herz 2A f 1 /5Data acquisition system . . . . . . HS-GFCS II Minimag

FLIGHT LINES

Flight number Flight direction

Flight line number 11020

'——— Reflight Number——— Line Number

——— Area Number

Fiducials identified on profiles

VLF CONTOURSFrequency response

of VLF-EM filter

Contours in percent

•10-

STATION

NAA Cutler (Maine) - 24.0 kHz Cycles/metre

LOCATION MAP77'30'W

44'45'N

NTS: 31C/12,13,14 UTM ZONE: 18 NAD 2 7

SCALE: 1:250,000

LYDIA CONSOLIDATED DIAMOND MINES OF CANADA LTD

GRIMSTHORPE BLOCK, ONTARIO

FILTERED VLF

HS-GFCS II Minimag

DATE: OCTOBER, 2000

NTS; 31 C/14

JOB: 2034

GEOPHYSICIST:

SHEET: 1

Fugro Airborne Surveys

0.5 1.0 Km

Scale 1:10 0000.5 Mi

FUGRO AIRBORNE SURVEYS