4tiessw88M BALDWIN 010

PROSPECTUS dated June 28, 1977

NO SECURITIES COMMISSION OR SIMILAR AUTHORITY IN CANADA HAS IN

ANY WAY PASSED UPON THE MERITS OF THE SECURITIES OFFERED HERE-

UNDER AND ANY REPRESENTATION TO THE CONTRARY IS AN

GLENCAIR MINING COMPANY LIMITED an Exploration * Development Company

Suite 1402, 390 Bay Street TORONTO, Ontario

NEW ISSUE

OFFERING:

PURPOSE OF ISSUE:

The Company is of ferine hereunder up to 500,000 treasury shares. These shares will be sold, paying normal brokerage fees in accordance with minimum Toronto Stock Exchange commission schedules through registered securities dealers, at the market price from time to time, on a best efforts basis with a minimum return to the Com pany of 23.5 cents per share. (SEE HEADING - THE OFFERING - PAGE" 10. The Company will pay commission as above but not selling expenses. The proceeds received by the Company from the sale of treasury shares hereunder will be held in trust by the Company's registrar and transfer agent until a minimum sum of 575,000 net to the Company has been received or for a period of 90 days, whichever occurs first. In the event of failure to receive the sum of S75,000 net to the Company, all monies received on behalf of the Company shall be returned to the subscribers.

The purpose of this offering is to raise funds to cover the cost of the Company's proposed exploration programme on its properties and for general operating expenses. (SEE HEADING - HISTORY AND BUSINESS AND USE OF PROCEEDS - PAGES l S. 10. )

THE SHARES OF THE COMPANY ARE SPECULATIVE SECURITIES. See within under "Speculative Nature of Offering"

THERE IS NO MARKET FOR THESE SECURITIES, able to sell shares purchased hereunder.

A purchaser mav not be

J*: Vte.

Registrar and Transfer Aqents THE CANADA TRUST COMPANY

110 YONGE STREET Toronto, Ontario

M5C 1W2

TABU:

PAGE

HISTORY AND BUSINESS. . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l

USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FRONT PAGE S, 10* !

THE OFFERING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FRONT PAGE S 10 si

CAPITAL STRUCTURE.. ,. . . . .. . . . . . . .. . . . . .. . . .. .. .. ,. . . . . . . .. 11 S!5!

CAPITALIZATION............................................ 12 |

ESCROWED SHARES ............................,.............. 13 m

PRINCIPAL HOLDERS OF SHARES ............................... 13 \

PURCHASER'S STATUTORY RIGHTS OFWITHDRAWAL AND RESCISION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

REMUNERATION OF MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

OPTIONS TO PURCHASE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16O

PROMOTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 g

INTEREST OF MANAGEMENT AND OTHERSIN MATERIAL CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

TRANSFER AGENT AND REGISTRAR. , . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

MATERIAL CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . 17

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20^

AUDITORS' REPORT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

NOTES TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

CERTIFICATE OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

PRIOR SALES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

SPECULATIVE NATURE OF OFFERING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

OTHER MATERIAL FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

•till- -

l -

GLENCAIP MINING COMPAtlY LIMITED

HISTORY AND BUSINESS

Glencair Mining Company Limited (hereinafter called the "Company") was incorporated as a public company under the laws of the Province of Ontario by Letters Patent dated Feb ruary 6, 1946 with a capital of S3,000,000 divided into 3,000,000 shares of par value of SI.00 each. By Amendment of Articles of Incorporation dated July 20, 1976, the shares of the Company were changed to shares of no par value.

By Amendment of Articles of Incorporation dated June 16, 1977 the capital of the Company was increased by the creation of 1,000,000 Preference Shares having a par value of 1/10 cent per share.

The Company was incorporated to engage in the acquisition exploration, development and operation of mines, mineral lands and deposits. Both the head office and the principal office of the Company are located at Suite 1402, 390 Bay Street, Toronto, Ontario.

___ Township, Sudbury Mining Division, Ontario

By an agreement dated August 31, 1976 with Mid-North Engineering Services Limited (Kid-North), the company acquired a 901 undivided interest in an option for the period of twelve months on 480 acres or thereabouts comprising the following parcels all located in the northwest quarter of Baldwin Township, Sudbury Mining Division, Ontario (hereinafter referred to as the "Mining property").

(a) The northern seven eighths of the east half of Lot 8, Concession 5, Baldwin Township.

(b) Leased Mining claims S140265 to S140268 inclusive.

(c) Unpatented claim S209482 (application for lease submitted).

(d) Unpatented mining claims S397987 and S397989 inclusive.

The consideration for the property was S15,000 paid forthwith to Mid- North on signing the agreement and to assume all the options, obligation and rights to the mining property as they appear in a previous agreement dated 31 August, 1976 between Mid-North of the first part and Conrad F. Springer, McKerrow Post Office, Ontario (Springer) of the second part and Geotek Exploration and Prospecting Incorporated (Geotek) 31 Cedar Street, Suite 204, Sudbury, Ontario of the third part. The further consideration to be paid under this latter agreement are as follows s

(1) Two option payments of S25,000.00 on August 31, 1977 and 1978 and a further option payment of $50,000 on or before August 31, 1979.

(2) The Company is required to carry out a scintillometer survey over the property during the first years option. (This survey and a magnetometer survey have already been completed).

(3) To carry out 2,000 feet of surface diamond drilling.

(4) To carry out a further 3,000 to 5,000 feet of surfacediamond drilling if the results from (2) and (3) warrant it.

(5) If the property is brought into production the company agrees to deliver to Springer and Geotek free treasury shares to a total value of $150,000 at the market value of the shares at the time a decision to enter production is made.

(6) To pay to Springer and Geotek a minimum of 15% of the net earnings from production until they receive a total of $215,000 or a minimum royalty payment of S25,000 per annum to be applied against the $215,000 if production is not achieved by June l, 1980. The company also agrees to pay Geotek and Springer 3.5 cents per ton of ore mined from the mining property.

Under the terms of the agreement Mid-North retained a 1 QI non-assessable interest in the mining claims.

By a further letter agreement dated 4th April, 1977, Mid-North re linquished its 101 non-assessable interest and consequently the company now owns a 1001 undivided interest in the mining claims.

By a letter of agreement dated 28 June, 1977 the option payment in Clause l above and due on August 31, 1977, has been extended for 60 days to October 31, 1977 or to 60 days from the date of commencement of drilling on the property, whichever is earlier.

The company proposes to finance its business ventures by sale of unissued treasury shares (SEE HEADING - THE OFFERING).

The mining property is without a known body of commercial ore and the proposed development programme is an exploratory search for ore only. There is no surface or underground plant or equipment on the property. A 400 foot grid system has been line cut on the property.

The property lies 4 miles north of McKerrow on Highway 17 and is accessible by a good year round road.

f1-

- 3 -

The following is a summary of a report to management by H. Grant Harper, P.Eng., the company's consulting engineer whose full report dated January 3, 1977 is available in the public files of the Ontario Securities Commission.

Around 1951 the Ontario Government made an airborne radio metric survey of some 14 townships including Baldwin. Agnew Lake Mines Limited in Hyman Township some 6 miles northeast of the Glencair property is readying for production.

The property was explored during the 1955 uranium boom and later around 1968 it was explored by Broulan Reef Minos Limited. 18 holes were drilled on the property of which the logs and assays of 13 holes totalling 5,525 feet are available.

The search by Broulan Reef was for higher grade sections and this is understandable in consideration of the uraniun price in 1968. Today the economics for uranium are different and a more systematic drill pattern is required for proper evaluation.

In 1976 the Company carried out ground scintillometer and magnetic surveys which had not been done previously.

The elements of the geology of the Glencair property are, a basement of Keewatin volcanics unconformably overlain by the Huronian Sedimentary Sequence, both of which are intruded by sills of gabbro, diorite, ano diabase.

Post Huronian folding created a northeast trending anti- cline-syncline complex which plunges gently to the east. The general area is sliced by regional faults such as the Worthington Lake Fault and the Cameron Creek Fault whose lengths and systems are measurable in hundreds of miles.

The valuable element, sought on the Glencair property, is uranium. It is known to occur on the claim in two different geo logical environments. First, within the Mississagi Formation in certain arkosic beds showing some poorly developed quartz pebble conglomerate layers carrying pyrite and, second, in erratic intra formational conglomerates having a wide variation in size and character of the cobbles and having a greywacke matrix.

Most of the diamond drilling was done circa 1967 when the demand and price of uranium was very low relative to today. The holes were spotted to search for high grade material. The CS series of three drill holes put down by Conrad Springer in 1970 are somewhat different in design. They were an attempt to evaluate a particular uraniferous zone. However, because of a lack of elevation data, a shortage of drill footage, etc., the attempt, though commendable, was not adequate.

Today, the demand and price for uranium are such that much of the lower grade material known to occur on the Glencair property is of potential economic value and therefore a program of appraisal is required. This can be accomplished by drilling a predetermined pattern of holes collared so as to give a uniformly spaced pattern of intersections of the uraniferous horizons. From such data the

f 115 '^ necessary tonnage and grade calculations can be made.

The first area to be drill testec or. at. evaluation basis should be the area centered in the south east qua~ter of claim S 209482 and the south west quarter of S140267. Four holes have been drilled in this and the assav results aro tabulated below.

DRILL HOLE FOOTAGE WIDTH ^ C 303

Al-1 44.8 - 49.1 4.3 .0249.l - 52.0 2.9 .0552.0 - 54.9 2.9 .0454.9 - 58.4 3.5 .0258.4 - 63.4 5.0 .0163.4 - 64.4 1.0 .0464.4 - 67.7 2.3 .02

77.4 - 79.4 2.0 .0279.4-84.5 5.1 .0284.5 - 87.3 2.8 .0587. 3 - 89.6 2.3 .0189,6-91.5 1.9 .04

CS-1 203.5 - 213.5 10.0 .07

CS-2 50 - 53.5 3.5 .05

58.5 - 68.5 10.0 .0568.5 - 77.0 9.5 .0982 - 84.5 2.5 .1599 - 111.5 12.5 .07

133 - 137 ' 4.0 .10

CS-3 232.5 - 233.5 1.0 .10

The above drill results are spread over a rough strike length of 600 feet in an area of extremely rough terrain. There are no elevations on the drill collars. Three holes are drilled from north to south while CS-1 is drilled from south to north. The area warrants proper drill evaluation within the 600 foot strike length and beyond, particularly to the east, where the zone can be traced on surface for an additional 1,000 feet before it becomes lost in heavy overburden.

There are two other areas where similar evaluation programs need to be undertaken. The* first includes the area probed by drill holes Al-6 to Al-11 inclusive, where some very wide but low grade intersections were encountered. The second location is the scintillometer anomaly lying between lines 30W and SOW some 700 feet north of the baseline. Only two holes, Al-2 and 3 have been drilled into this anomaly which has a strike length of 2,000 feet. Favourable results were obtained in both drill holes, as follows.

Drill ResultsHole Footages______ Core Length - ft.

Al-2 135.8 - 142.0 6.2 plus several low grade sections

Al-3 34. - 36. 2.0 .0585.6 - 87.5 2.1 .08

o . ?*n n s.l

k,-./-

There is a fourth area of interest - a wildcat drill bet. It is located along the north boundary of claim S397989 roughly 800 to 1,000 feet along strike of the first drill area described above. In this area a few modestly high radiometric readings are detectable through overburden.

The magnetic survey was a total field survey made with a Geonics G816 Proton Magnetometer.

The maqnetic survey has not been helpful in the search for uraniferous formations.

The radiometric survey by Glencair in 1976 appears to have been the first survey as such to be carried out on the property.

The anomaly centered just south of the baseline between Lines 42W and 54W is the most attractive. A ground examination shows that this is not the single anomaly as portrayed on the radiometric map, rather, it is a double anomaly consisting of two radioactive beds of

poorly developed quartz pebble conglomerate which seem to converge to the west. On claim S209482, the geological map shows a small piece of Mississagi extending into this claim from its east side and that the bulk G f. the c.laim is underlain by gabbro. The radiation survey, in an area of light overburden, indicates that there is more Mississagi Formation in this area than previous maps portray.

The double bed geological character also extends to the large double anomaly extending from 34W to SOW and lying north of the baseline. This anomaly is best exposed at its west end where the radioactive zones are relatively narrow and not very strong. The potential pf this anomaly is probably greater towards its eastern end where fairly good counts are detectable through light overburden.

The radiation anomaly lying east of the road to Agnew Lake is also a double anomaly but it is different in that the northern portion of the zone is due to radioactivity in poorly developed quartz pebble conglomerate beds of the Mississagi Formation, while the southern part is due to radioactivity in intraformational conglomerate.

Some additional surface work would assist in the exploration of the property. Its quantity is small and it can easily be done by the core grabber during the diamond drilling phase. First, short picket lines at 100 foot intervals should be cut through the areas selected for drill testing. This would amount to about three miles of cutting and picketing. Second, some VLF surveying would be useful particularly on the southern three claims much of which is underlain by greenstones which to the south and west contain some small but high grade copper deposits. At most this would involve two days of field work. It is questionable if VLF surveying of the entire property would be useful. There is some evidence of strike faulting north of the baseline and a suggestion of cross-faulting along the road leading to Agnew Lake. If the core grabber had the available time, additional VLF surveying might prove quite useful.

. RECOMMENDATIONS

l- A minimum of 2,000 feet of diamond drilling is recommended to evaluate the known uranium occurrences. Most of this footage is likely to be required to evaluate the occurrence lying just south of the baseline between lines 42W and 54W. One wildcat drill hole should explore the possible uranium occurrence in the north central part of claim S397989.

2. A relatively minor amount of surface work involving linecutting, VLP surveying, and differential levelling for diamond drill hole collars is also recommended. This work can be done by the core grabber during the drilling phase.

3. Contingent upon the results of the 2,000 feet of evaluation drilling recommended in l above, a second drilling phase comprising a minimum of 3,000 linear feet will be reauired to properly evaluate the other described uranium occurrences.

The above recommendations are proposed to be carried in 2 phases as follows:

PHASE l

1. Diamond Drilling2,000 linear feet at S12. per footincluding all servicing. S24,900

2. Core grabbing services, line cutting,VLF surveying, camp supplies, travel, etc. 2,500

3. Logging core, sampling, assaying, andengineering supervision, includinq travel. 3,000

4. Contingency allowance 1,500

TOmAL $31,000

PHASE 11

1. 3,000 linear feet at Sil. per foot S33,000

2. Logging, assaying, supervision 3,000

3. Contingency allowance 2,000

TOTAL S38,000

GRAND TOTAL - S69.000

It is proposed to initiate Phase l and follow with Phase 11 warranted, if as and when funds are available to the Company^s treasury,

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FRASER LAKE prospect, Northern Saskatchewan

By an agreement dated November 8, 1976 with Mid-North the Company acquired a 10(^ undivided interest in 1,400 acres, more or less, comprising CBS 4717 (hereinafter referred to as the "Mining Block") in the La Ronge Mining District, Northern Saskatchewan and located on Claim Map 74-H-2.

The consideration for the property is:

(a) S2,800.00 (the cost to Mid-North) paid forth with.

(b) On achievement of profitable production l i (one per cent) of gross value of production from the mining block shall be paid to William T. Knox, 27 Banquo Street, Thornhill, Ontario (the original staker).

le) On or before November 12, 1977 Mid-North haj the right to buy back a 1Q* (ten per cent) assessable interest in the mining block by payment of 101 o f all costs incurred by Glencair from the date of the agreement.

By a letter agreement dated 4th April, 1977, amending the foregoing agreement dated 8th November, 1976, Mid-North has relinquished its buy-back interest in 10% of the mining block and consequently, the Company now owns a 1001 undivided interest in the mining block.

The mining block is without a known body of commercial ore and the proposed development program is an exploratory search for ore only. There is no surface plant or equipment on the property.

The mining block is located about 30 miles south- east of Key Lake. It is within the Wollaston Lake belt and is accessible by float plane from La Ronge, 130 miles to the south.

The following is a summary of a report to management by D. Glenn Harder B.Se. Professional Geologist, whose full report dated January 13, 1977 is available in the public files of the Ontario Securities Commission.

CBS 4717 lies within a large tract of land explored by a Scintrex airborne Electromagnetic, magnetic and radio metric survey in 1969. The survey disclosed a radiometric and E.M. anomaly identified with block CBS 4717.

In 1969 previous operators cut a 2,500 feet east-west grid line and the radiometric anomaly was outlined as being 1,000 feet by 200 feet in size. Trenching was done in 1971 and further work was recommended but not carried out, doubtless A due to the conditions existing in the uranium market at that time.

The anomalies were restaked as CBS 4717 in 1976 and acquired by the Company. D. Glenn Harder B.Se. (Harder) prospected'the property in October, 1976 and found several new radiometric anomalies southeast of the airborne anomaly.

Harder found anomalous radioactivity in 4 outcrops east of the airborne anomaly. Grab samples assayed 0.3 Ib., 0.3 Ib. , 4 Ibs. and 1.8 Ibs. l^Og per ton.

Uranium deposits in other parts of the province are commonly overlain by swamps and lakes and were originally found by tracing radioactive boulders back to the favorable structure underlying the ore bodies e.g. Rabbit Lake and Key Lake.

Uranium is commonly associated with metal sulphides of iron, copper, molybdenum and nickel because uranium forms insoluble oxides under the same reducing conditions that formed these conductive sulphides. This makes the EM anomaly an attractive target, especially as there is already known uranium in bedrock and boulders along the side of it. One possibility is that the EM anomaly is the result of metal sulphides con centrated in fractures.

RECOMMENDATIONS

1. Linecutting on an east-west line, possibly using j the 2,500 foot base line cut in 1969, cleaning it up and \ extending it to the east to cover the entire length of the i claim block. Cross lines should be cut at 400 foot intervals.

15 miles of line should be enough to cover the entire airborneEM anomaly. Because of the extensive swamp it would be -bestto do it in winter.

2. VLF EM and Magnetometer survey to outline conductors and structure respectively. Should be done by two operators working concurrently. This would be easiest to do in winter.

3. Scintillometer and Geological survey could be done concurrently by two men during the summer or fall. Emphasis should be placed on structural geology. Boulder tracing and some radon in soil would also be useful.

4. Radon waters survey, concentrating along EM anomalies in swamps and creeks.

5. Trenching of new anomalous outcrops.

f 6. Diamond drilling o f targets where three or more of the following situations is indicated: strong conductivity,

i; strong magnetic field, extensive radioactive bedrock, radio- v- active boulders apparently close to source, high radon in ^v waters, high radon in soils, favorable structure. ''

COST ESTIMATES

Phase l

Linecutting 15 miles at S250 /mile

EM and Magnetometer survey at S200 /day

Geological mapping, scintillometer survey, boulder tracing

Radon in waters survey (75 samples)

Trenching

Transportation and accomodation

S 3,750

3,000

2,500

750

500

2,000

312,500

Phase 11

This phase is contingent on the results of Phase 1.

Diamond drilling 2,000 ft. at S20 /ft. 540,000

Assaying 2,000

Supervision 6,000

It is proposed to carry out Phase l initially and if, as and when funds are available carry out Phase 11 if warranted by Phase 1.

A'-•f''

SPECULATIVE NATURE OF OFFERING

The shares of the Company being offered by this pros pectus should be considered an investment involving risk and are speculative. The Company is not realizing any income at the present time from any of its projects. The projects for which the funds raised by this offering will be used, involve risk since there can be no assurance that the minerals being sought will be in economic quantity.

- 10 -

SE OF PROCEEDS

The Company proposes to spend the funds to be raised by the sale of up to 500,000 treasury shares at a minimum of 23.5 cents per share to provide a minimum of S75,000.00 net to the Company to carry out the recommendations of H. Grant Harper P. Eng. the Company's Consulting Engineer in respect of the Baldwin Township property and also the recommendations of D. Glenn Harder B.Se. Consulting Engineer in respect of the Fraser Lake property in Saskatchewan as follows:

Baldwin Township Phase l $31,000Option payment Baldwin Township 25,000Saskatchewan (Fraser Lake) 12,500One year Administration 3,500Estimated cost of this offering 3,OOP

75,000 Less funds in Treasury 23,139

Minimum Required 551,861

Excess monies will form part of the general working Capital of the Company.

Monies will not be expended on any new properties acquired without an amendment to this Prospectus being filed and accepted if the securities of the Company are then in the course of distribution to the public. Monies in the Company's treasury will not be used to invest, underwrite, or trade in securities other than those that qualify as investments in which Life Insurance Companies, may, under the laws of Canada, invest their funds.

THE OFFERING

The Company will offer up to 500,000 treasury shares through registered security dealers at the market price, from time to time, on a best efforts basis, provided that the net proceeds to the treasury shall in no event be less than 23.5 cents per share. The Company will pay normal brokerage commissions in accordance with minimum Toronto Stock Exchange fee schedules to any registered security dealer selling the Company's shares as its agent.

- 11 -

The Company's Registrar and Transfer Agent, The Canada Trust Company, 110 Yonge Street, Toronto, Ontario, will hold in trust all proceeds received for the account of the Company, until a minimum of S75,000.00 net to the Company has been received, or for a period of 90 days, whichever occurs first. In the event of a failure by the Company to receive at least S75,000.00 net to the Company within a 90 day period from the date of acceptance by the Ontario Securities Commission of this Prospectus, all monies received will be returned in full without any deduction to the subscribers.

CAPITAL STRUCTURE

COMMON SHARES

The common shares of the Corporation are without par value. The holders of common shares are entitled to dividends if as and when declared by the Board of Directors; upon liquid ation, dissolution or winding up of the Corporation to receive those assets distributable to shareholders subject to the prior rights of the holders of Preference Shares described below-; to receive notice of and to attend and vote at all meetings of shareholders of the Corporation. Two shareholders personally present and entitled to vote thereat constitute a quorum. Resolutions at shareholders' meetings may be voted upon by a show of hands unless a ballot is required by law or a poll is demanded by a shareholder. On a show of hands every shareholder exercises one vote whereas on a poll every shareholder exercises one vote for each share held by him. In either case the Chairman of the meeting has a second or deciding vote in the event of a tie vote. There are no pre-emptive or conversion rights. There are no indentures or agreements extant or proposed limiting the payment of dividends. None of the shares outstanding and none of the shares offered hereby will be subject to call or.assessment of any kind. No dividends have been paid by the Company to date.

PREFERENCE SHARES

The Preference Shares with a par value of 1/10 of 1C per share are not entitled to dividends at any time; are entitled, in the event of the liquidation, dissolution or winding up of the Corporation to receive, in priority to the Common Shares, a sum equal to the par value thereof; but are not entitled to any further participation in the assets of the Corporation; are redeemable by the Corporation at the par value thereof upon the expiration of five years from the date of issuance thereof; are not transferable without the prior written consent of the Ontario Securities Commission; and, entitle the holders thereof to receive notice of all meetings of shareholders and to one vote for each Preference Share held. The number of issued Preference Shares outstanding at any time is limited to 500,000 in number, and the presently issued Preference Shares are not subject to call or assessment.

- 12 -

WARRANTS

The Corporation has authorized the creation of warrants to accompany the preference shares hereinbefore referred to. The warrants permit the holder to subscribe for common shares on a warrant-for-share basis. Not more than 500,000 promoters' shares and accordingly not more than 500,000 warrants may be outstanding at any given time.

Warrants may be exercised from time to time to an amount not to exceed 25% of the number of common shares issued for cash pursuant to the underwriting herein referred to at the price of 150% of the maximum price received for the shares offered.

As warrants are exercised the underlying promoters' shares shall be redeemed by the Corporation on a share-for-warrant exercised basis. The warrants may be exercised during the five year period following the issuance of the preference shares after which the remaining underlying promoters' shares shall be redeemed and the remaining warrants extinguished.

Warrants carry no voting rights and may not be transferred except with the prior written consent of the Ontario Securities Commission.

CAPITALIZATION

Designation of Security

Common shares

Preference shares, par value of 1/10 of K per share (with warrants attached. see below)

Warrants to purchase common shares

Amount Authorized

3,000,000 (not to be issued for more than 53,000,000)

1,000,000 (SI,000)

Amount Outstanding

as at the date of the most recent balance sheet

contained in the Prospectus, i.e. March 31, 1977

2,000,000 ( 2)

(Sill,842)

500.000 (4) (S500)

1,000,000 500,000 (1)

Amount Outstanding

as at March 31. 1977

2,000,000 (2)

,842)

500,000 (4) (S500)

Amount Outstanding

if all securities being issued

are sold

2,000,000 (3)

(S229.342)

500,000 (S500)

500,000 500,000

(1) Warrants may be exercised to no more than 25t of the common shares issued for cash pursuant to the current underwriting i.e., 25* of 500,000 - 125,000 warrants which may be exercised to purchase 125,000'common shares at the price of 150* of the maximum price received per share in this offering.

(2) Including 884,764 shares held for benefit of the treasury.

(3) Including 384,764 shares held for benefit of the treasury.

(4) Issued and outstanding on 27th June, 1977.

- 13 -

ESCROWED SHARES

At the present time, certificates representing 115,236 shares referred to below are held in escrow by The Canada Trust Company, 110 Yonge Street, Toronto, Ontario, subject to release, transfer or other alienation only on the written consent of the Company and the Ontario Securities Commission.

Designation of Class

Common Shares of no par value

No. of Shares held in Escrow

115,236

Percentage of Class

5.764

Of 1,000,000 originally held in escrow, 884,764 shares have been donated by former owners to be held in trust by The Canada Trust Company for the benefit of the Company's treasury.

Since the property for which the shares were orginally issued is no longer held by the Company, a request for the return of the shares was made by the Company, however, it has not been possible to trace the holders of 115,236 shares which are still held in escrow as tabulated above. There is no likelihood that these shares can subsequently be released from escrow.

PRINCIPAL HOLDERS OF SHARES

Set forth hereunder are particulars of the present principal holder of shares of the Company as of June 27, 1977.

Name and Address

Kam-Kotia Mines Limited 390 Bay Street Toronto, Ontario

Mid-North Engineering Services Limited 390 Bay Street Toronto, Ontario

Class of Security

Common shares

Preference Shares

Type of Ownership

Of record and bene ficially

No. ofSharesOwned

721,322

500,000

Percentage of Class

If^-v lu!Ur* L;

t The percentage of shares of the Company and of its parent company {Kam-Kotia Mines Limited) owned directly or indirectly by all directors and senior officers of the Company.

Designation of Class Percentage of Class

Kam-Kotia (common) 3.91 Glencair Mining Company (common) G.9%

PURCHASER'S STATUTORY RIGHT OF RESCISSION AND WITHDRAWAL

t The Securities Act, 1970, contains 'Sections 64 andi 65) certain provisions enabling a purchaser of securities- offered in the course of distribution to rescind the contract! of purchase:

t (a) while the purchaser is still the ownerof the securities if the Prospectus and any amended Prospectus, at the date of receipt by the purchaser, contains an untrue statement of a material fact or omits to state a material fact in order to make any statement contained therein not misleading, but only if action is commenced within 90 days from the last to occur of the receipt of the Prospectus or amended Prospectus or the contract of purchase.

and

(b) if the person or company from whom the securities were purchased is notified in writing or by telegraph of the pur chaser's intent to rescind not later than midnight of the second day, exclu sive of Saturdays, Sundays and holidays, after receipt by the purchaser of the Prospectus or amended Prospectus. A Prospectus or amended prospectus sent by prepaid mail is deemed conclusively to be received in the ordinary course of mail. The receipt thereof by a person or company acting as agent or who thereafter commences to act as agent of the purchaser shall be in receipt thereof? however, for purposes of the aforegoing, a person or company is not considered to be acting as agents of the purchaser unless the person or company is acting solely as an agent of the pur chaser and .has not received and has no

MANAGEMENT

- 15 -

agreement to receive compensation froir or on behalf of the vendor with respect to the purchase or sale. This right of rescission is not available to a registrant or tc a purchaser who sells or otherwise transfers beneficial ownership of the securities purchased before the expiration of the .ime within which rescission may be effected.

The names of the Directors and Officers of the Company and the positions presently held are listed below:

Name and Address

Arthur Walter White 72 Dunvegan Road Toronto, Ontario

Herbert Rodney Heard 6 Blithfield Ave. Willowdale, Ontario

James Geddes1461 Mildmay CourtMississauga, Ontario

Harvey Vance White 53 Chicora Avenue Toronto, Ontario

Harry Idris Miller 1202-17 Farmstead Road Willowdale, Ontario

Graham Wilson Walkey131 Princess Anne CrescentIslington, Ontario

Howard Samuel Dolson SOS-346 The West Mall Etobicoke, Ontario

Position with Company

President ( Director

Vice-President ( Director

Secretary/Treasurer and Director

Director

Director

Vice-President Engineering

Assistant Secretary

___Principal Occupation1 1|

Mining Executive, President, Dickenson Mines Limited

Chartered Accountant with Mid-North Engineering Services Limited

Chartered Accountant with Mid-North Engineering Services Limited

Mining Executive with Mid-North Engineering Services Limited

Mining Executive, President New Kelore Mines Limited

Mining Engineer, Vice-President Karo-Kotia Mines Limited

Accountant withMid-North Engineering ServicesLimited

Each of the above has held the principal occupation for the preceding five years.

REMUNERATION OF MANAGEMENT

Each director of the Company will be paid a fee of SSO.OO for each director's meeting. No official will be paid a fee.

Mid-North Engineering Services Limited, 390 Bay , Street, Toronto, Ontario, provides management, accounting and secretarial services, including office space at a cost of $200.00 per month i y

- 16 -

OPTION TO PURCHASE SECURITIES

On October 5, 1976, stock options were granted to Directors and Senior Officers for past services and incentive purposes in the amount of 105,000 shares at 20 cents per share. These were granted 15,000 shares to each of A.M. White, H.R. Heard, J. Geddes, H.S. Dolson, H.I. Miller, G.W. Walkey and H.V. White.

The options terminate upon death or termination of services of the optionee except that the estate of an optionee may exercise such options up to one month following the date of death. Subject to the aforesaid, the options shall not be transferable or negotiable.

The options are exercisable \intil December 31, 1979.The minimum price allowable for the issue of shares

was used to establish the price to be paid for the optioned shares.

PROMOTER

Kam-Kotia Mines Limited by reason of its ownership of 721,322 common shares of the Company and Mid-North Engineering Services Limited by reason of its ownership of 500,000 Preference Shares are in a position to elect or cause to be elected a majority of the Directors of the Company now and in the foreseeable future. Kam-Kotia by a prospectus was the promoter of Amalgamated Rare Earth Mines Limited, which Company now has its properties bein-} developed by Imperial Oil Limited.

Mid-North Engineering Services Limited recently was the promoter of Gateford Mines Limited under a prospectus for exploration of the Gate ford properties in the Kirkland Lake, Ontario, area. As a result of the work carried out further diamond drilling and underground work was recommended.

AUDITORS

The auditors of the Company are Thorne Riddell 6 Co., Box 262, Royal Trust Tower, Toronto-Dominion Centre, Toronto, Ontario.

REGISTRAR AND TRANSFER AGENT

The Canada Trust Company, 110 Yonge Street, Toronto, Ontario, is the stock registrar and transfer agent of i.he Company.

PRIOR SALES

No securities of the class offered by this Prospectus have been sold by the Company in the twelve months prior to the date of this Prospectus.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Mid-North Engineering Services Limited provides secretarial services and Head Office facilities for the Company at a cost of 3200.00 per month (referred to under the heading "REMUNERATION OF MANAGEMENT").

The only persons having a greater than 5* interest in Mid-North Engineering Services Limited are A. W. White, H. R. Heard, James Geddes and H. V. White. A. W. White is also the President and a Director of Kam-Kotia Mines Limited.

James Geddes is a Director and Assistant Secretary of Kam-Kotia Mines Limited, also Secretary and a Director of Mid-North Engineering Services Limited.

H. R. Heard is Secretary-Treasurer of Kam-Kotia Mines Limited also Vice-President and a Director of Mid-North.

G. W. Walkey is Vice-President and General Manager and a Director of Kam-Kotia Mines Limited.

H. I. Miller is a director of Kam-Kotia Mines Limited.

H. V. White is a director of Kam-Kotia Mines Limited and a director of Mid-North.

H. S. Dolson is Assistant Treasurer of Kam-Kotia Mines Limited.

MATERIAL CONTRACTS

The material contracts entered into by the Company within the two years prior to the date hereof are as follows:

(1) Agreement dated August 31, 1976 between the Company and Mid-North referred to ' under heading HISTORY AND BUSINESS on Page 1.

(2) Agreement dated November 8, 1976 between the Company and Mid-North referred to under heading HISTORY AND BUSINESS on Page 6.

(3) Letter Agreement dated April 4, 1977amending Agreement dated August 31, 1976. See HISTORY AND BUSINESS on Paqe 2.

- 18 -

(4) Letter Agreement dated April 4, 1977amending Agreement dated November 8, 1976. See HISTORY t, BUSINESS on Page 7.

(5) Letter* Agreement dated 28 June, 1977 amending Agreement dated August 31, 1976, extending option. See HISTORY 6 BUSINESS on Page 2.

During the distribution of securities offered by this Prospectus, copies of the aforementioned agreements may be inspected at the Head Office of the Company during normal working hours.

- 19 -

THORNERIDDELL6 CO. CHARTERED ACCOUNTANTS

AUDITORS' REPORT

To the Shareholders ofGlencair Mining Company Limited

We have examined the balance sheet of Glencair Mining Company

Limited as at March 31, 1977 and the statements of income, deficit and

changes in financial position for the five years then ended. Our

examination was made in accordance with generally accepted auditing

standards, and accordingly included such tests and other procedures

as we considered necessary in the circumstances.

In our opinion, these financial statements present fairly the

financial position of the company as at March 31, 1977 and the results

of its operations and the changes in its financial position for the

five years then ended in accordance with generally accepted accounting

principles applied on a consistent basis.

sgd. Thorne Riddell 6 Co.Toronto, CanadaApril 7, 1977 Chartered Accountants

DUPLICATE COPYPOOR QUAUTY ORIGINAL

TO FOLLOW

Offices across Canada: internationally McLintock Main Lafrenz 6 Co.

m.-3S&-; fes*:

V ' •fif-

^Thorne Riddell s Co, CHARTERED ACCOUNTANTS

AUDITORS' REPORT

To the Shareholders ofGlencair Mining Company Limited

We have examined the balance sheet of Glencair Mining Company Limited

as at March 31, 1977 and the statements of income, deficit and changes

in financial position for the five years then ended. Our examination' was

made in accordance with generally accented auditing standards, and

accordingly included such tests a r. c other procedures as we considered

necessary in the circumstances.

In our opinion, these financial statements present fairly the financial

position of the company as at March 31, 1977 and the results of its

operations and the changes in its financial position for the five years

then ended in accordance with generally accepted accounting principles

applied on a consistent basis.

Toronto, Canada April 7, 1977 Chartered Accountants

]

- 20 -

GLENCAIR MINING COMPANY LIMITED (Incorporated under the laws of Ontario)

BALANCE SHEET AS AT MARCH 31, 1977

ASSETS

CURRENT ASSETS CashShort term deposits Accrued interest receivable

INVESTMENT IN OTHER COMPANIES Marketable securities,at cost less allowance

for decline in value (note 1)

MINING PROPERTIES (notes 2 and 3)

EXPLORATION EXPENDITURES DEFERRED (notes 3, 4 and 5)

LIABILITIES

CURRENT LIABILITIESAccounts payable and accrued liabilities

SHAREHOLDERS' EQUITY

CAPITAL STOCK (note 6) Authorized

3,000,000 shares without par value Issued

2,000,000 sharesLess discount on shares

DEFICIT

Approved by the Board

A. W. WHITE Director

J. GEDDES Director

1977

65723,000

19123,848

1976

1,00550,100

45051,55*5

S

7,427

17,800

5.997

55.072 S

7,427

58.982

709 S 500

111,842

111,84257.47954.363

2,000,0001.888.158

111,842S3.36058,482

55.072 S 58.982

' :-..a ,": Hii;'r.

- 21 -

GLENCAIR MINING

STATEMENT

IncomeInterest and dividend income Profit (lost) on disposal of marketable securities

ExpensesAdministrative service* Legal and audit Ontario capital tax General expenses Transfer fees Directors' fees Preparation of prospectus

NET INCOME (LOSS)

COMPANY LIMITED

OF INCOME

ear ended March 311977

5 3,371

3.371

1,8002,000

50705185

1,5501.2007.490

1976

S 5,162

5.162

1,0505005014

1.614

1975

J 4,256

13.42917.685

900

5020

970

1974

S 1,969

141.983

750

: 108

9153

1.020

1973

S 1,180

(3.964)(2.7S4)

700

539

76J

8 3.548 S16.715 S 963 f(3.S46)

STATEMENT OF DEFICIT

DEFICIT AT BEGINNING O? YEAR Net income (loss)

OEFICIT AT END OF YEAR

Year ended March 311977 1976 JL221 1974 1973

553,360 S56.908 S73.623 S74.586 371,040(4.119) 3.548 16.715 963 (3.546)

.479 S53.360 S56.908 S73.623 S74.586

- 22 -

J X,S

It

GLENCAIR MINING

STATEMENT OF CHANGES

WORKING CAPITAL DERIVED FROM Operations

Net income (loss) Gain (loss) on disposal of

marketable securities

Proceeds from disposal of marketable securities

WORKING CAPITAL APPLIED TO LossAcquisition of marketable securities Acquisition of mining properties Deferred exploration expenditures

INCREASE (DECREASE) IN WORKING CAPITAL

WORKING CAPITAL AT BEGINNING OF YEAR

WORKING CAPITAL AT END OF YEAR

COMPANY LIMITED

IN FINANCIAL POSITION

Year ended March 311977

S

AM

1976

3,548

3,548

MHMMMMMM*

3.548

1221S16.715

13.4293 , 286

2S.S29 28.815

1974

S 963

14949

4.123 -15.^072

1973

S(3,546)

(3.964) 418

2.936

S 4,1191,336

17,800 5.997

27,916

(27,916)

51.055

S23.139

3,548

47.507

S51.055

28,815

18.692

S47.507

1.536

3,536

15.156

518,692

3,354

11.802

S15.156

- 23 -

0GLENCAIR MINING COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 1977

1. MARKETABLE SECURITIES1977

f Listed shares l Dickenson Mines Limited

3,844 shares at cost (quoted market value1977, 517,682; 1976, 519,701) 515,505' 515,505

Davis-Keays Mining Co. Limited2,500 shares at cost, (quoted market value

1977, S475; 19'6, S775) 6.922 6.92222,427 22,427

Less allowance for decline in value 15.000 15.000

S 7.427 S 7.427

?. MINING PROPERTIES(a) Under an agreement dated August 31, 1976 with Mid-North Engineering

Services Limited (Mid-North), the company acquired a 90* undivided interest in an option for the period of 12 calendar months on nine mining claims in the Township of Baldwin, in the District of Sudbury, for the initial consideration of 515,000. The company has also agreed to assume Mid-North's contractual responsibilities under their agreement dated August 31, 1976 with Geotek Exploration and Prospect ing Incorporated (Geotek) and Conrad F. Springer (Springer).

To keep the option in good standing the agreement requires further payments of 525,000 on or before August 31, 1977 and 1978 and 550,000 on or before August 31, 1979. The company has completed a scintillo meter survey and is now committed to 2,000 feet of surface diamond drilling to be followed by a minimum of 3,000 feet of additional drilling if warranted.

If the property is brought into production the company agrees to deliver to Geotek and Springer free treasury shares to a total value of 5150,000, at the market value of the shares at the time the decision is made. In addition Geotek and Springer are entitled to receive'a minimum of 1 57. of the net earnings from production until they receive a total of 5215,000 or a minimum royalty payment of 525,000 per annum to be applied against the 5215,000 if production is not achieved by June l, 1980. The company also agrees to pay Geotek and Springer 3.5 cents per ton of ore mined from these claims.

Under the original terms of the agreement Mid-North had retained a; 107. non-assessable interest in the mining properties. In a letter f v\ dated April 4, 1977 Mid-North relinquished its iOfc interest In the

.''' above claims. Glencair Mining Company consequently owns a 1001 ~ ;ir ' . .interest. V---; .-- - ". ' i ; '- : -,- i 'v ; V-':'V

i- . ' V .' v^':^ : ^:^:^^^^m", --.'." .--: - :-••:-- •'.^/^.^^•'-- s&N&^^^t^ •- * . -.v , ;-:;.,- ^^^m^^MAmM-

- 24 -

GLENCAIR MINING COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS (Continued)

MARCH 31, 1977

2. MINING PROPERTIES (Cont'd)(b) Under an agreement dated November 8, 1976 the company acquired 100Z

interest in claim block CBS 4717 in the LaRonge Mining District in the province of Saskatchewan, for the consideration of S2,800. The company has agreed to pay William T. Knox 17. of the gross value of production from the mining property once profitable production has been achieved.

Under the original terms of the agreement the company granted an option to Mid-North Engineering Services Limited to buy back a 107. assessable interest in the property on or before November 12, 1977. In a letter dated April 4, 1977 Mid-North relinquished its option to purchase the 107, interest in the above claims.

3. RECOVERY OF COSTSAt March 31, 1977 the cose of obtaining mining claims amounting to 517,800 and exploration expenditures amounting to S5.997 have been deferred with the intention that they ahould be amortized by charges against income from future mining operations. The recovery of these costs is dependent there fore, upon the obtaining of adequate financing and the development of economic mining operations.

i. EXPLORATION EXPENDITURES DEFERREDThe company has incurred expenditures in the process of conducting a scintillometer survey on the Township of Baldwin mining claims. The expenses consist of the following:

Linecutting SI,553Survey 2,040Travel 430Consulting 1,641General 333

S5.997

5. INCOME TAXESAt March 31, 1977 the company has a loss carried forward on a tax filing basis of $4,311, the tax effect of which has not been recorded in the

'f accounts. This loss carried forward is available to reduce future income(! for tax purposes until 1982.

The company has mining exploration expenditures available for tax purposes in future years in excess of the total expenditures deferred in the accounts at March 31, 1977 of approximately S21,700.

- 25 -

GLENCAIR MINING COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS (Continued)

MARCH 31, 1977

6. CAPITAL STOCK

(a) By special resolution by the directors made on June 4, 1976, the company applied for and was granted Articles of Amendment by which its authorized capital stock was changed from $l par value to no par value shares.

(b) At a directors' meeting held October 5, 1976 stock options were granted on 105,000 shares of the company's capital stock to the directors and officers of the company. The options are exercisable at twenty cents per share at any time on or before December 31, 1979. As of March 31, 1977 no shares have been issued under these options.

(c) At a meeting of the board of directors on March 31, 1977, a special resolution was approved to increase the authorized capital of the company by 1,000,000 non-participating, voting preference shares of the par value of $.001 each. Dividends will not be paid on these shares and the shares shall be redeemed at par five years after the date of issue.

Warrants will accompany the preference shares. The warrants may be exercised from time to time on a warrant for share basis to an amount not to exceed 25%, of the number of common shares issued for cash, pursuant to an underwriting, at a price of 150% of the maximum price received for the shares issued.

The directors have accepted subscriptions for 500,000 of these shares. The creation and issue of these shares is subject to the approval of the common shareholders and the granting of Articles of Amendment.

DUPLICATE COPYPOOR QUALITY ORIGINAL

TO FOLLOW

GLENCAIR MIKING COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS fContinued)

yARCH 31, 1977

j. CAPITAL STOCK(a) By special resolution by the directors tnade on June i, 1976, the

company applied for and was granted Articles of Amendment bv which its authorized capital stock was changed from SI par value to no par value shares .

(b) At a directors' meeting held October 5, 1 076 stock options were granted on 105,000 shares of the company's capital stock to the directors and officers of the company. The options are exercisable at twenty cents per share at any time on or before December 31, 1979. As of March 31, 1977 r.o shares have beer, issued under these options.

(c) At a meeting of the board of directors on March 31, 1977, a special resolution was approved to increase the authorized capital of the company by 1,000,000 non-participating, voting preference shares of the par value of S.OC1 each. Dividends will not be paid oTn these snares and the shares shall be redeexec at par five years after the date of issue.

Warrants will accompany tr.e preference shares. The warrants may be exercised from tixe to tiT.e on a warrant for share basis to an amount not to exceed 25', ::" the number of common shares issued for cash, pursuant to an undervriting, at a price of 150T, of the maximutr price received for the scares issued.

The directors ha"e acceptec subscriptions for 500,000 of these shares. The creation and issue o: t::ese shares is subject to the approval of the common shareholders and the granting of Articles of Amendment.

lifclfr.

"f:.- 26 -

THERE ARE NO OTHER MATERIAL FACTS

The foregoing constitutes full, true and plain disclosure of all material facts relating to the securities offered by this Prospectus as required by Part VII of The Securities Act, 1970 and the regulations thereunder.

DATED this 28th day of June, 1977.

DIRECTORS

A. W. WHITEPresidentChief Executive Officer

JAMES GEDDES Treasurer Chief Financial Officer

H. I. MILLER Director

H. V4 WHITE Director

PROMOTER

KAM-KOTIA MINES LIMITED

G. W. WALKEY VICE-PRESIDENT

H. R. HEARD SECRETARY-TREASURER

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