New Klondike Exploration Ltd.

Santa Maria

Project Details

On October 29, 2009 the Company entered into an option agreement to acquire a 100% interest in 5 mining claims, consisting of 11 claim units (the “Santa Maria Claims”) in the Kenora Mining Division, northwestern Ontario.  The Santa Maria Claims were owned by Robert J. Fairservice (the “Optionor”) and are located approximately 45 km southeast of Dryden, Ontario.
 
The Optionor granted the Company the right and option to acquire a 100% interest in the Santa Maria Claims whereby the Company agreed to make cumulative exploration expenditures on the property of $150,000 over a three-year period (during the first, second and third years of the option, $25,000, $50,000 and $75,000, respectively), make cash payments totaling $30,000 ($5,000 upon regulatory approval, $10,000 on October 29, 2010 and $15,000 on October 29, 2011) and issue 56,250 common shares of the Company (12,500 upon regulatory approval, 18,750 on October 29, 2010 and 25,000 on October 29, 2011) to the Optionor over the three-year term of the option.  The Optionor has retained a 2% NSR on the Santa Maria Claims and the Company has the right to purchase 1% of the NSR for payment of $500,000.
 
On October 24, 2011, the Company entered into an amending agreement with the Optionor wherein, the Optionor agreed to accept a $6,000 cash payment in lieu of the $15,000 payment required in the original agreement on October 29, 2011.  In addition, the Optionor agreed to waive in its entirety, the work commitment for the claims as stipulated by the October 29, 2009 agreement.  The Company issued 25,000 common shares to the Optionor on October 25, 2011 as per the terms of the original agreement and made the $6,000 cash payment to the Optionor on October 24, 2011.  The Company provided notice to the Optionor that the Company had fulfilled all of its earn-in obligations under the option and had earned a 100% interest in the 5 claims. On November 25, 2011, title to the claims was transferred to the Company.
 
The Company staked 14 mining claims in November 2009, consisting of 76 claim units, contiguous to the Santa Maria Claims, and granted the Optionor a 1% NSR on these claims.   On November 1, 2011, the Company was granted an extension of time, until May 2, 2012, to complete and report required assessment work on these 14 claims.
 
On November 14, 2011, the Company entered into an option and working agreement with Black Widow Resources Inc. (“Black Widow”), a privately owned Canadian firm.  The Company granted Black Widow an option to earn a 70% undivided working interest in the Santa Maria Project, by making a $10,010 option payment to the Company (received) and incurring expenditures of $90,000 on the claims on or before May 1, 2012.  
 
On April 27, 2012, the Company received notice from Black Widow that it had met the expenditure and other requirements of the November 2011 option and working agreement to exercise its option and vest a 70% interest in the Company’s Santa Maria project.  Black Widow also provided notice that they had staked an additional five (5) claims consisting of 59 claim units covering approximately 940 hectares contiguous to the original Santa Maria claims.  Black Widow agreed to incorporate and make the new claims part of and subject to the November 2011 agreement.  Black Widow also confirmed that they had filed appropriate reports for the required assessment work requirements on the claims.
 
Accordingly, Black Widow is now the operator of the Santa Maria Project with the Company retaining a 30% undivided working interest in the property.  Each party is now required to fund its respective pro rata interest in approved programs and expenditures on this project or be subject to dilution of its interest.  In the event that a party’s interest is reduced to 10%, its interest will automatically be converted to a 1.5% net smelter royalty interest and the working arrangement will terminate, with the other party vesting a 100% participating interest in the project.  Black Widow has retained the right to acquire 1% of this potential royalty for $500,000, at any time, from the Company.
 
In January 2012, Black Widow commissioned Geotech Ltd. to complete an airborne geophysical “VTEM” survey over the original 19-claim group and has submitted the airborne survey for assessment credit purposes.  The airborne survey flight plan was designed to overfly the boundaries of the original claims to the northeast and southwest.  At the end of some of the flight lines, most particularly to the northeast, very interesting multi-channel electromagnetic anomalies were observed in the initial interpretation of the survey data.  Summary interpretation details of the 3 anomalies discovered during the recent airborne survey can be found in the Company’s press release dated May 11, 2012.  Interpretations of the airborne data are continuing and recommendations for a follow-up work program are being developed.
 
Project Geology
A Technical Report (NI 43-101) was prepared with an effective date of November 25, 2009.  A copy of that report may be found in the Maps & Geology section for the Santa Maria property on this website.
 
The Santa Maria property lays within the Eagle-Wabigoon-Manitou Lakes Greenstone Belt, which is one of a series of six interconnected greenstone belts that makeup the western part of the Wabigoon Subprovince in Northwestern Ontario. Numerous elliptical shaped granitic batholiths thought to be derived from the same parent magmas as the volcanic rocks are enclosed within the greenstone belts.  The Revell Lake Granite batholith is located approximately 5 km to the east of the Santa Maria Property.  The greenstone belts are made up of 60 – 80% untramafic to felsic volcanic rocks of various types and 20 - 40% clastic and chemical metasediments.  All of these rocks have been extensively deformed and intruded locally by syntectonic and post tectonic plutons, dykes and small bodies of ultramafic to felsic composition.
 
The Santa Maria property is underlain by calc-alkaline metavolcanics of the Archean aged Kawashegamuk Lake Group.  These rocks, a lower mafic sequence and an upper felsic to intermediate sequence, have been folded around the eastwest trending axis of the Tabor Lake anticline.  All of these rocks have been intruded by dykes and small bodies of hypabyssal felsic rocks, most of which are elongated, also along an east-west trending axis.  A very strong northwest trending fault/shear structure passes along the southwest boundary of the claim group. The axis of this structure follows Kawashegamuk Lake (also referred to as Long Lake) and several gabbroic intrusive bodies are located along or proximal to the Kawashegamuk Lake structure.  This structure is also coincident with the axis of a zone of intense carbonate alteration that affects the mafic intrusive and volcanic rocks, as well as younger quartz and quartz-feldspar porphyry bodies in the area.