Ganarin Project

Description

Ganarin is a low sulphidation epithermal gold-silver deposit located in southern Ecuador 65 kilometers southwest of Cuenca. Access is good and topography a dissected plateau ranging from 1200 to 2200 meters altitude. Climate is warm and semi-arid with cactus scrub and agricultural land.

The Ganarin property is subject to option and joint venture agreements with Doubloon Exploration Corp. whereby, Nortec has the option to acquire 51% interest in the Ganarin property located in Azuay province, Ecuador. The Ganarin property is situated in the prolific Ganarin Mineral Belt. IAMGOLD Corporation's Quimsacocha gold deposit occurs in the same belt approximately 40 kilometres northeast of the Ganarin Property Channel Resources' El Mozo gold property also is located in the same area.

Geology

Geology at Ganarin comprises andesite-dacite porphyry lava/intrusive and ignimbrites with silica cap alteration at the highest elevations. Narrow quartzcarbonate veins with high, and sometimes spectacular, gold and silver values cut the volcanic rocks at lower elevations. These veins were exploited during pre-Spanish colonial times and in the 1980's and 1990's by artisanal miners but have not been drill tested. Mineralization and hydrothermal alteration at Ganarin are typical of low sulphidation epithermal precious metals deposits. Such deposits have long been recognized and exploited and world class examples exist. Mineralization occurs across a significant area at Ganarin so there is good potential for discovery of an economic gold-silver deposit.

Exploration

Trenching with systematic channel sampling has been carried out designed to provide assays of the veins and breccias over mineable widths. Four areas of interest were identified on the project; Chamana area, Rio Minas zone, Chuscuyacu zone and Loma La Cruz zone.

Chamana Zone:
Significant results over substantial lengths were obtained from systematic channel sampling of trenching in the Chamana Oeste and Chamana Este zones in the Chamana area. The results are detailed below. Some of the results from surface sampling over short lengths were 18.35 grams/tonne, 22.6 grams/tonne and >1000 grams/tonne gold. The Company is encouraged by these sample results suggesting the presence of economic bonanza gold-silver deposits at depth.

Chamana Oeste:
Trenching and channel sampling of a north-east trending road-cut within the large geochemical soil anomaly in the Chamana Oeste area returned values of 0.628 grams/tonne gold over 104 metres including 0.931 grams/tonne over 32 metres. The detailed grid soil anomaly (line spacing of 25 metres) with values greater than 100 parts per billion gold and as high as 2 grams/tonne gold was traced over an area 200 metres by 300 metres by sampling. The area is underlain by zones of intense silicification, argillic alteration, quartz-chalcedony breccias and vuggy-druzy quartz stockwork zones, including silica sinter deposits.

In 1993 Newmont Mining drilled 6 random rotary holes in the area. One of the holes was designed to intersect the Chamana Oeste breccia zone at depth. The hole was terminated at the top of the breccia zone due to drilling problems, but It returned 3.6 grams/tonne gold over 1.5 metres at the bottom of the hole. Detailed geological mapping and geochemical soil anomalies suggest the mineralization is controlled by north-north-east and east-north-east structures. Further trenching of other geochemical soil anomalies is in progress.

Average Values - Trench No CTR05-14
From (metres)	To (metres)	Length (metres)	Gold (g/t)	Silver (g/t)
2.0	106.0	104.0	0.628	1.33
4.0	90.0	86.0	0.722	1.42
4.0	84.0	80.0	0.753	1.45
10.0	76.0	66.0	0.794	1.50
10.0	72.0	62.0	0.811	1.51
12.0	64.0	52.0	0.833	1.48
52.0	84.0	32.0	0.939	1.54

Chamana Este:
Chamana Este zone occurs approximately 180 metres east of the Chamana Oeste zone. Channel sampling of exposed chalcedony breccias and an underground cross-cut approximately 25 metres apart returned significant gold-silver values as shown in the following tables. A large geochemical soil anomaly with values greater than 100 ppb gold and values as high as 647 ppb gold was delineated in the area. The anomaly occurs over an area approximately 200 metres by 100 metres and trends east-west.

Trench No CTR05-02 (surface sampling of chalcedony breccia zones with stockwork veins and veinlets from mineralized structures to the south-east wall)

Average Values - Trench No CTR05-02
From (metres)	To (metres)	Length (metres)	Gold (g/t)	Silver (g/t)
0	18	18	0.761	15.81
2	18	16	0.843	16.79
2	5	3	3.115	50.60

Trench No CTR05-03 (underground cross-cut towards mineralized structure towards south-south-east):

Average Values - Trench No CTR05-03
From (metres)	To (metres)	Length (metres)	Gold (g/t)	Silver (g/t)
11	14	3	3.865	38.47

Rio Minas:
Detailed mapping and systematic follow up sampling of the high grade zones is continuing on the Rio Minas zone. Very significant gold values (greater than 1500 grams/tonne gold over 30 centimetres) were obtained from smectite/clay fracture fillings with rounded chalcedony fragments. These fractures fillings are hosted in very tight rhyolite welded tuffs, suggesting tops of epithermal systems. Drilling is being planned to intersect these structures in favorable host rocks below the welded tuffs.

Geochemical soil surveys at 25 metre line spacing suggest several favorable subparallel structures for precious metal mineralization.

The Rio Minas Zone occurs at an elevation of 1340 metres a.s.l., approximately 330 metres below Chamana, 220 metres below Loma La Cruz and at the same elevation as the Chuscuyacu (Red 3). These results suggest that Loma La Cruz and Chamana have significant potential at depth.

Chuscuyacu (Red 3) and Loma La Cruz:
Trenching and systematic channel sampling of the geochemical soil gold anomalies is being carried out to determine the source of the anomalies. Intense argillic alteration zones appear to underlay the soil anomalies.

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