LAC EDGAR & GIRARD WEST IRON OVERVIEW

Zone Resources Inc. announced that it has acquired an option to earn a 100% interest in the Lac Edgar and the Girard West Iron Properties, consisting of over 63,000 acres, located in Nunavik, northern Quebec.

The properties contain a minimum of 6 zones of iron mineralization, that were identified in historic work completed by the Quebec Labrador Development Company Limited, between 1947 and 1960. The zones of iron mineralization are located over a length of 19 kilometers and a width of up to 5 kilometers. Outcrop is limited and overburden is up to 25 feet (7.6 meters) deep. As a result, the property was not extensively worked during the period that the major iron mines of the Labrador Trough were developed near Schefferville and Labrador City.

LAC EDGAR

Totaling 315 claims and over 36,000 acres is the Lac Edgar claim block. Drill hole ZR11-09, the first and only hole to date on the Lac Edgar claim block, intersected an iron formation with an average of 35.64% Fe over 137.00 metres.

Drill hole ZR11-09 was drilled at -50 degrees along a 9 kilometre long airborne magnetic anomaly. It was collared in magnetite-rich iron formation at the base of casing at 3.00 metres. Iron contents of individual samples ranged up to a maximum 45.06% Fe, with the previously mentioned average of 35.64% Fe over the 137.00 metre intercept. A second, narrower zone of iron formation averaging 29.01% Fe of 10.45 metres was encountered 86 metres below the 137 metre intersection. The dip of the main iron zone in proximity to drill hole ZR11-09 is approximately vertical based on core angles. Drill hole ZR11-09 was collared in iron formation, and therefore did not intersect the full width of the main zone.

The magnetic survey previously flown over the Lac Edgar claim group outlined numerous magnetic anomalies: the aggregate length of all the magnetic anomalies, believed to be caused by magnetite iron formation (with amplitude over 1,000 nT), is approximately 50 kilometres in length and has the potential for Direct Shipping Ore ("DSO")

GIRARD WEST

Totaling 226 claims and over 26,000 acres is the Girard West property. Drill hole ZR11-08, the first and only hole to date on the Girard Lake West claim block, intersected an iron formation with an average of 35.77% Fe over 243.00 metres.

Drill hole ZR11-08 was drilled at -50 degrees on a 5 kilometre long airborne magnetic anomaly in the western part of the Girard claim group. It was collared in magnetite-rich iron formation at the base of casing at 6.00 metres. The iron zone continued for 243.00 metres. Iron contents of individual samples over core lengths of between 1.50 and 2.00 metres ranged from 23.49% Fe up to a maximum 45.55% Fe, with an average of 35.77% Fe over the entire 243.00 metre intersection.

EXPLORATION HISTORY

The Lac Edgar and Girard West properties were explored between 1949 and 1954 by Quebec Labrador Development Company, which held a concession over the area; it was geologically mapped in considerable detail. Trenching and drilling were also carried out However only partial drill results are available, while there are records of trench sampling and assays.

Nine showings or zones were discovered on the Lac Edgar and Girard West properties. Of these, there is some information available on three, while the other six are simply noted on the geological map.

McDonald Showing (Lac Edgar)
GM2160A states that:
"A showing known as the McDonald was discovered, having a rust area of over one and one half miles and widths exceeding 500 feet."

Four trenches totalling 2600' and 26 test pits were completed on the north end of this zone where the overburden was lightest and a minimum of water was encountered. High iron assays were secured but the silica content also was high, but as work preceded south the silica content decreases. However, in this work, quartzites were encountered and test pits were then put down to determine the strike, widths and dips, but as yet this work has not been carried through to a definite conclusion."

The following table gives a summary of the trench results.

Historic findings indicate that 36 drill holes of less than 100 feet were put down on the McDonald showing and surrounding area with "poor results". However, given that their objective was to find DSO, and looking at the trench assays, which averaged 44.6% Fe and ranged as high as 65.24% Fe - well within the range of DSO - and bearing in mind that finding a taconite deposit was not regarded as a success, it is quite possible that drill results comparable with those from the Moore-Ross Mountain property would be considered "poor".

Ball No. 1 Showing (Lac Edgar)
This showing is described as having heavy rust over an area of 1400 feet by 900 feet. According to GM2160A, there is a fold in the iron formation:

"The country rock at the Ball showing is iron formation of the Hard-Ore Jasper type, consisting of finely oolitic jasper, magnetite and hematite with minor amounts of iron carbonate and silicates. Oxidization of this rock has produced a soft, crusty-textured., blood-red material in which most of the iron minerals have been converted to hematite and some of the silica has been leached out. Analysis of nine samples showed iron content ranging from 28% to 43% and silica from 24% to 59%; a composite sample of these nine specimens assayed 0.22% sulphur and 0.0107% phosphorus. Prospecting is made difficult by overburden which ranges in depth to at least 25 feet and testing must be done by digging pits through it to bedrock. The work done to date consists of 15 test-pits, covering a length of 800 feet and a width in one place of 600 feet. The actual dimensions of the oxidized zone are not known because of the glacial covering; on the evidence of the soil colouration however, it is estimated that not more than 10% of the zone has been test-pitted. Five short diamond drill holes were driven to confirm the general character of the oxidized formation.


Eight drill holes 1948 Maximum depth 50' intersected limonite-slate-chert. No logs available. All diamond drilling was done by a small X-Ray drill. Very soft low grade hematite was encountered to depths of 40 feet increasing in depth as work progressed to the east, Due, however, to heavy boulders, overburden and a capping of green slates, the drill was not of sufficient strength to operate further and drilling was discontinued but not before an area exceeding 600 feet in width and 1000 feet in length was explored. "

Ball No. 2 Showing (Girard West)
Little information is available for this occurrence. According to GM 2160A:
"Showing is indicated by red discoloration of the overburden. The report indicates very little trenching due to thickness of the overburden and closeness to the river. Test pitting here consisted of two trenches and several pits, but water encountered made this work impractical with the equipment on hand and this work had to be abandoned.
Assays values are shown below."


The geological map shows the locations of the showings described above, as well as six others:

• Jongman River Prospect Girard West)
• Girard Lake Showing Girard West)
• Gagnon No. 1 Showing (Lac Edgar)
• Gagnon No. 2 Showing (Girard West)
• Carter Showing (Lac Edgar)(possibly also called the Carter-Birch Showing)
• Carter-Steele Showing (Lac Edgar)

Further information is not available on these occurrences.