THAUTIL RIVER COAL PROPERTY++-

SHELL CANADA RESOURCES LTD.

OPERATOR: CROWS NEST RESOURCES LTD.

C.L.# 4299-4240

SMITHEBS AREA 93 L/6

Work done: hkiy to August 1981

Authors: D. Handy S. Cameron

Submitted: December 15 1981

- 1 -

.(I Summary

The Smithers Area Coal Prospects are contained within 58 8.C. Coal

Licences which cover 14.236 hectares. In addition Shell/CNRL hold 3,886

hectares under option agreements. The licences are held by Shell Canada

Resources Limited and are operated by its wholly-owned subsidiary, Crows

Nest Resources Limited.

The area in general, and the Telkwa licences in particular, lie in

proximity to the Canada National Railway, 360 km east of the port of

Prince Rupert. Existing infrastructure, the proximity of a coal

handling port and the good quality of the coal make some of these

prospects attractive.

The Chisholm Lake and Thautil River prospects are approximately 10 km

from an existing good logging road on the south side of the Morice River

which runs east for 50 km to the town of Houston.

The primary objective of the exploration program was to locate and

delineate areas of large reserves amenable to mining.

Based on the 1981 exploration the Thautil River and Chisholm Lake

Ticences have been surrendered.

!,,lrhOlm Lake N.Lat.54O14'

N.Long.l27“13’

immediately north of Chisholm Lake ./

hautil River N.Lat.54O16' along the Thautil River north Of ./

N.Long.127“20' its confluence with the Morice

River

'BYa.

+ b Crows Nest Resources

December 8, 1981

Ministry of Energy, Mines and Petroleum Resources 8ritish Columbia

Enclosed please find our report on the Smithers Area Coal Prospects.

This report has been prepared by Mr. D. Handy and Mr. S. Cameron, both of whom are employed by Crows Nest Resources Limited as geologists.

Mr. D. Handy, Honours B.Sc., graduated in Geology from the University of Waterloo in 1977.' Prior to his graduation, Mr. Handy worked as an assistant for two geotechnical companies and.after graduation as a geologist for a major exploration company in Saskatchewan. Mr. Handy has been employed by Crows Nest Resources Limited as a Project, Geologist since 1979.

Mr. S. Cameron, B.Sc., in Geolegy graduated from the University of Calgary in.1981. Priorto graduation Mr. Cameron worked as an, assistant for a major exploration company in the North West Territories. He also worked for Crows Nest Resources Limited as a geological assistant in 1980. Mr. Cameron has been employed by Crows Nest Resources Limited as a Geologist since May 1981.

Their work was carried out under the supervision of our District Manager, British Columbia, Mr. Frank Martonhegyi.

In my opinion, all of these personnel are fully qualified, by training and experience to prepare this report and this account of work done under their direct'supervision.

Yours very ly.

$ivfbJL/ I/"

H.G. Rushton, P. Geol. Vice-President - Exploration.

(il

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Y 7.0 Thautil River Property

7.1 Summary of Previous Work

During the 1979 field season the following exploration work was

performed:

0 l:lO,OOO scale geological mapping

0 Hand trenching

0 one diamond drill hole

0 location survey of diamond drill hole

0 drill site reclamation

No exploration work was performed during 1980.

7.2 Work Done in 1981

The 1981 field operations were supervised by Dave Handy of Crows

Nest Resources Limited. The following exploration work was

performed.

0 diamond drilling

0 drill site reclamation

0 geophysical survey

0 210Ya.42

I

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Four diamond drill sites were cleared in 1981, however holes were

drilled on only three of these sites. These drill holes were

completed to a total depth of 560 metres.

The total cost of the 1981 exploration work was $186,244.

1.3 Thautil River Stratigraphx

General

The basement rocks of the Thaut il property consist of upper

Jurassic/lower Cretaceous volcanics of the Hazelton Group. These

volcanics consist mainly of basalt, andesite, trachyte, rhyolite and

agglomerate.

These volcanics are unconformably overlain by upper Jurassic/lower

Cretaceous sediments also of the Hazelton Group. In the Thautil area

these sediments are composed mainly of conglomerate, with some

sandstone, shale and minor coal capping the section. The sedimentary

section at Thautil River ranges from 0 to over 275 metres.

Younger intrusives bound the sedimentary basin to the north.

2lBYa.43

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Coal Stratigraphy

One coal seam of approximately 1.5 metres thickness is present in

outcrop at the northern part of the property. This seam which was not

encountered in any drill holes to the south, has been eroded over most

of the property. However, a large area1 extent of coal measures is

unlikely to the north because the sediments are terminated by

intrusives.

Thautil Structure

The Thautil River area appears to be a northerly plunging synclinal

structure, relatively undisturbed by faulting. A northerly plunge to

the syncline would explain why the small coal seam is not present in any

drill holes to the south. The seam may be present at depth to the

north. Dips on the Thautil property do not exceed 250.

On the basis of the results of 1979 and 1980 exploration programs the

Thautil River licences have been surrendered.

2fBYa.44

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CROWS e RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION s- B.C.

AI ,“I, TH. _ - - - - -.. -. .

NO. &$ FROM 1 TO MAIN AMPLIFIED 1 INCLUDE COAL RECOVERY FOR EACH SEAM,

1 22.85 cl 122.85 2283 1 - ovERmmm 22.83 ( CmiG . I - cbarse I&ales Cmql.

-’ Edim grained saIK?stone ..“i =-w>a1 lenses.

e @ @ CROWS NEST RESOURCES LIMITED

CORE &COAL CORE DESC~RIPTION PROJECT TwAmIL RIVER

AREA SMImmR5, B.C.

I t I I I I I I I I I I I I I I I I I I

I

t I I I I I I I I I I I I I I I I I I I

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CORE & COAL CORE DESCRIPTION PROJECT ‘IHAVTIL RWER

AREA SMIrn. B.C.

I I I I I IASAWHO~EOX2SEEK5TOEEREPRESENmNG I I I I I I I I I I I I I I A FINING UPWARD sD2uExE FRc+! COARSE OULINED I

! ! ! ! ! I o3taommm m A SnJYKlm. ! ! ! 1 ! ! ! ! ! ! ! ! I

L I I I I I I I I I I I I I I I I I I I I

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e CORE & COAL CORE DESCRIPTION

PROJECT

AREA

140.57 ) 12.7 1 1 (barse pebble corqlom I I I I 1 40.57 - 40.80 - Ll.lm‘ 1 42.49 .- --

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I 143.27 I 1 I At 40.97 6.5 ted (0.65m thick) I 142-U I I I I I I I I I I I I I I K45.)1 I

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CROWS NE c RESOURCES LIMITED t

CORE & COAL CORE DESCRIPTION PROJECT THAurIL RIVER

AREA 1 SMI?HERS, B.C.

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CORE &COAL CORE DESCRIPTION PROJECT mL4urIL RIVE?

ARE/l SNIrnERs, B.C.

LIMITED E e

CORE & COAL CORE DESCRIPTION PROJECT 1 THAVTIL RIVER

AREA SHnwLR.5, B.C.

E CROWS NEST RESOURCES LIMITED

CORE &COAL CORE DESCRIPTION

c a (” CROWS N ’ RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION

-

PROJECT

AREA

77.3 77.3 .05

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CORE & COAL CORE DESCRIPTION PROJECT lwAmIL RIVER

AREA SMnw.Rs, B.C.

9 CROWS NE ~RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION PROJECT 1

AREA

e e CROWS NEST RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION PROJECT ‘R1AurIL RIVER

AREA 1 SHITHWS, B.C.

I I 1108.6 I I .14 I I- sandstone. ve c0.x53 cmined. N3 I ciradiw. Nz &inq xqle available

I I I I I I I I I I I I 1108.74 I I I I

e RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION PROJECT

AREA

I I

I I I I I I I I I I 1 REOOVERY FROM MRRms

I I I I I I I I

I I I I I 110 - 113 100% I I I I I I I I I I I I

t i I I I I I I I I I I I I I I I I I I

1

RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION

8 PROJECT ‘IHRUTII. RIVER

AREA SMITHERS, B.C.

1128.201 lo.33 I 1 S.S. - mEdim arained I I I I I I I I I I I I I I 1128.53 1 I - rm ondim - uniform 72’ lR4 1

I I I I I I I 1 I I I I I I I

CORE & COAL CORE DESCRIPTION PROJECT ZHAVPIL RIVER AREA --smlms, B.C.

1 / j135.47/ I I I I I I I I I I I I I 10.041 I SS. - uniform 161” I I I

135.51 I - fine cp-ained 167" IS3 I I 1

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CORE & COAL CORE DESCRIPTION PROJECT MALmL RIVER AREA SMImERs. B.C.

CORE &COAL CORE DESCRIPTION PROJECT

AREA

211 1140.261140.5010.241 I S.5. - thin be I I I

I I I I I I I I I I I I I I 1147.201 10.101 I SS. - verv fine 9rained. uniform I I lR2 I I I I I I I I I I

1147.301 ! ! - wisrs Of coal mesent 1.66 190% I

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PROJECT

AREA

lwAUT?I. RIVER

SMI’IHWS. B.C.

I I I I I I I I I I I I I I-YBcIwEENMRR~ I I I I

I I I I 152 - 155 (3.10/3.00) 103% I

c CROWS NEST RESOURCES liMITED

CORE &COAL CORE DESCRIPTION

Q PROJECT

AREA lwwrILRnrw c?zamms, B.C.

MAlN ASH% “.M.% F.C.% F.I.I. C.“.

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CORE &COAL CORE DESCRIPTION PROJECT ~-- AREA stJIlmm, B.C.

I I I I I IFmxmRY--

I I I I I I I I I I I I I I I I I 176 - 179 (2.92/3) 97% I I I I I I 1

G e e CROWS NEST RESOURCES L,M,TED

CORE 8, COAL CORE DESCRIPTION PROJECT

AREA

LITHO DESCRIPTION YY ““I”” ^.h .*.:.,.^I Ir\Sn%IV.M.~/.lF.C../.l F.S.1.1 C.“. 1

I I I I

I I I--EpLRKi

! ! I 182 - 185 (3.01/3) 100% 1 ! I ! I I I

184.12 1.95 -.- --I- _."_" -_ ---, - -29 tkrestisinBx29. Fallus in +zi3 1e siz

is 5nmto7arl-aql? sizebeinq1cm. lazqer at tco Of lmit than at the h-d

186.07 --. I t

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~186.071186.471 -40 , --I--.

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I I 1186.471186

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I I I I 301

I 1191.45 I 12.67 l

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I 191 I mnqmae. c!mtinuatim of 1mi+ an-ilrrl I

1194.12 I I I inEox29. I I I

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~ CORE & COAL CORE DESCRIPTION PROJECT 1 7lmlEu ~l-vm AREA sMIlTiEP”s, B.C.

I ! I 1203.78 1 I I Q&sesintDccn-Q~teatthebase. I I I I I I I I I I I I I I I ! I I I I , I I *___ -- 0 L __I . -...

-- n R3 I -- 0.34 66% I

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L I I I D_M. --&A,IC-LL-. mAnFlular to I I I 1206.31 I I sub--.

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AREA ~‘MAvI?L=vE+

z+zwmEs, B.C.

I I I I 206.59 I 1.26 I - c=a@cmmte.

I I sandstone units inter- in

206 1206.85 1 tbisconzlarerati. Averaqesizeofpebbles 50’ 83 I 430

I i 5m,br&znsticks I 0 $2.54 I I I I I

1.f I I ,

I-.sEu&tcile. coarseqr~, I I I I I

1750 IR3 l I I I I I

of aal I tbruqb ur!it, gEtting cl3arszG

I 207.11 I

I 1740 l I I

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I I I I 008.69 I Il.54 I mnqlmD=rate. ^^^ I F&a? size raL.,- -_-.. ^

’ h, averacre d &IL At 209.45 th-

1 I I I I P10.23 I 1.22 1

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~ CORE 8, COAL CORE DESCRIPTION PROJECT 1 n%mrILEuvER

AREA .s2alnEs, B.C.

I I I I I 1221.92 I

I I / I I I I 11.19 I I-siltstcne. Darkurey

1223.111 tobkk,cahmmas,I I

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In visible heddins amqle. I I I I I I I I I I I

c CROWS NEST RESOURCES L,M,TED

CORE & COAL CORE DESCRIPTION PROJECT

AREA 1 ~--

E2.umms. B.C.

mx DEPTH AT TOP DEPTH LITHO DESCRIPTION

NO. es5 FROM 1 TO TH.

MAIN AMPLWlED 1 INCLUDE COAL lECO”ER” FOR EACH SEAM,

I I I

I I 1227.351 lO.ZOl

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I 1227.551 I I aEklfI?agcents~t I I I I I I

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CORE & COAL CORE DESCRIPTION PROJECT ~-RIVER

AREA -, B.C.

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CORE & COAL CORE DESCRIPTION PROJECT AREA 1

mL4JrILRIvER -, B.C.

I I I I I I I I I I I I I I I I I I

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CORE 81 COAL CORE DESCRIPTION

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PROJECT 1 lmur.uRIvER AREA c.zalmm. B.C.

.,----..__- _ . _” I .

3 sMI?HEILs. B.C. II HO.-~~ ’

I I I I I I I I I I I I I I I I I I

I I 108% I I I I I I

c CORE 8 COAL CORE DESCRIPTION

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CROWS NCSl RESOuRCCs LlMl,ED

CORE & COAL CORE DESCRIPTION PROJECT

AREA 1

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CORE & COAL CORE DESCRIPTION PROJECT

AREA 1 lXUUlLRI.VPg

SWIHERS

c c CROWS NEST RESOURCES 1lMl1E0

CORE & COAL CORE DESCRIPTION PRWECT

*,Rm

LITNO DESCRIPTION -..

CROWS NEST RESOURCES LlMllED

CORE & COAL CORE DE.SCRlPTlON PROJECT ‘I‘lwJT*l. IUWR AREA WITHERS

e c CROWS NEST RESOURCES LIMITED

CORE &COAL CORE DESCRIPTION PROJECT Tlwnn. Rlvl AREA SNlTHERS

c c ” CROWS NEST RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION PROJECT

AREA

CROWS NEST RESOURCES LlMllED

CORE 8s COAL CORE DESCRIPTION PROJECT THALRIL RIVER AREA SMITHERR

LITHO DESCRlPllON

I I I I I I I I I I I I I I I I . 7 k3.75 I .I8 I ss

. 1 Liehr w. verv hard. massive 1 I I I

I I I I I

I

ti !

I I I I I I I I I I I I I I I I I 1 I tJ#wuwcKS J.Elm!ay I I I I

I I 92 - 9s 2.9 961 I I I I I I 1 1 I I I I I I

c c c CROWS NEST RESOURCES LIMITED

CROWS NEST RESOURCES LIMITED

CORE &COAL CORE DESCRIPTION

e E (f CROWS NEST RESOURCES LIMITEO

CORE &COAL CORE DESCRIPTION PROJECT TluuT*L R,.yIR AREA SH*rHERS

LITHO DESCRIPTION

” I I I I I I I I I I I I I I I I I I I bb%RKER macRs RECOMRY I

I I I I I LL, - 119 5.9 98% I I I I I I I 1 I I I I I

CORE 8, COAL CORE DESCRIPTION KS

..--.-.-

. I Lipht. so beddine--- !

c CROWS NEST RESOURCE5 LIMllED

CORE & COAL CORE DESCRIPTION PROJECT Tn&lqI~L PIWR AREA s

I I I I downwards I I I I I I I I I I I I I I I I I 1 I I I 1139.11 1110.19 I I.164 ss 1 Medium erain. 1iEhr POW. massive. core very 1 1 I I I I I I I

, c? CROWS NEST RESOURCES tIMlIED

CORE & COAL CORE DESCRIPTION ILKlYEB SHnHERS

LllHO DESCRIPllON

CROWS NEST RESOURCES LIMIIED

CORE & COAL CORE ,DESCRlPTlON PROJECT YWJYIL RIVER AREA RnlYHeRR

t I I I I I I I I I I I I I I I I

41.331 ss I 1

I I I I I I I I NARem BLmKS RECOVERY I I I I I 1 I I I I I I I

I I 1x - 155 2.6 73% I I 1

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CORE & COAL CORE DESCRIPTION

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CORE & COAI. CORE DESCRlPTlON PROJECT TnAuIIL RIVER

AREA S”*THERs

SS

C c c CROWS NEST RESOURCES LlMllLD

CORE & COAL CORE DESCRIPTION

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CORE & COAL CORE DESCRIPTION

‘RESOURCES LIMITED

CORE &COAL CORE DESCRIPTION PROJECT MAUT?L RIVER

AREA sMImm,- B.C.

d e CROWS NE RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION PROJECT THAurIL RIVER

AREA SMrnRs, B.C.

iF c CROWS NE RESOURCES LIMITED

CORE & iOAL CORE DESCRIPTION PROJECT 1 llmnTL RIVER

AREA .5HmmP.s, B.C.

CROWS N RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION SMITREPS, B.C.

x3.0”, I I 35.80 I ^^I -..-

I I I ! 36.72 i - Guurubz L-daL

36.72 36.821 .lOI I - cabonseous Mdstorr 36.82 36.861 .041 I - Siltstone

c c CROWS NES RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION PROJECT ‘MAUTIL RIVE+

AREA SMmERS, B.C.

d CROWS NE I RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION

c PROJECT TlfAuTIL RIVER

AREA SMITHWS, B.C.

LITHO DESCRIPTION

. men6cmc

Ii c c

CROWS NES RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION PROJECT 1 mAmIL RIVER

AREA SMIrnIHERs, B.C.

c eL CROWS N RESOURCES LIMITED

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CORE 8, COAL CORE DESCRIPTION PROJECT

AREA SMI?HERS, B.C.

c ,c CROWS NES RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION PROJECT “+AuTIL RWER AREA .sMIlwERs. B.C.

I i ,-_.-_ I I I I 1 finina dcunwxds vj

62 I 161.61 I I larqe F&k&s at bottom Of uni

RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION .sMImERs, B.C.

q Q CROWS NE 1 RESOURCES LIMITED

CORE & COAL CORE DESCRIPTION PROJECT 1

AREA

I 167.75 I I .611 I I I RI I I I I I I I I I I I I I

170.94 I I I Noaradim I I I Il.0 133.31 I I I I I I I I 71 170.94 I 12.971 ckrdomerate. sane as akove. excew R3 1 I I I I I I for calcite rim around the re&les I I I I I I I I I I I I I

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CORE & COAL CORE DESCRIPTION PROJECT

AREA

I I I I I I I I I I I I I I I I I I RECOVERY Markers 86 - 89 L

! ! ! I 3.1Em 106% 1 ! ! I ! ! ! ! ! I ! ! I .‘._..... “9 _ g* I I 2.88m 96% I Markers 92 - 95 I I 3.09m 103%