Location:

Block 103 covers an area of 20,000 hectares, located 30km northwest of the mining town of Schefferville, Quebec, Canada. Block 103 is on strike to Tata Steel/New Millennium "NML" magnetite deposits of KeMag & LabMag, which have a combined Resource of over 8 billion tonnes.


Current Exploration

The 2012 exploration program has been designed to include a minimum of 15,000 metres of diamond drilling and additional surface sampling, focused primarily on the continued investigation and definition of mineralization in the Greenbush Zone. Cap-Ex has completed approximately 8,000 metres of drilling to date. Detailed logging of all drill core collected to date is interpreted to indicate continuity of mineralization between the first (A to A') drill line and the second (B to B') drill line. Mineralized intersections ranging from 92 to 290 metres in thickness were encountered in 12 of the 13 holes completed on its second drill line. Drill hole spacing along the second drill line range from 150 to 270 metres, averaging approximately 200 metres. Drilling has already begun on the third drill line, located approximately 600 metres south of and parallel to the second drill line.

The results of the 2012 program will be used to support a National Instrument 43-101-compliant resource estimate of approximately 800 million to 1 billion tonnes with an average grade between 29% and 32% iron. The potential tonnage and grade are conceptual in nature as there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource. These figures are reported as exploration targets based on the presence of mineralized drill holes, mineralized zones which are open in most directions, and geophysical anomalies from data received by Cap-Ex.

The initial resource is currently planned to be released by the end of 2012, followed by a preliminary economic assessment, planned to be released by Q1 2013. Cap-Ex recently selected BBA to complete the Preliminary Economic Analysis of Block 103. BBA has extensive experience in the Labrador Trough, having acted as the primary engineering consulting firm for Consolidated Thompson's (now Cliffs Natural Resources) Bloom Lake Mine, ArcelorMittal's Mont-Wright concentrator and Alderon Iron Ore's Kami Project. The depth of local iron ore experience will allow BBA to expedite engineering design work, provide an experienced outlook into project costs and timelines, assist in selection of local construction firms, all of which will aid in minimizing overall project risk.

2011 Exploration

The most intense positive magnetic response in the iron ore belt was identified within Block 103.

2011- Airborne Gravity/Magnetometer survey identified, Multiple Magnetite anomalies on Block 103.

Two diamond rigs drilling around 6,000 metres from August to October have identified continuance between the Greenbush Zone magnetic anomalies.

Greenbush Zone - New Discovery

Based on the publicly disseminated 2011 drill results and airborne geophysical programs, the following interpretations can be formulated regarding the Greenbush Zone:

The area with strong magnetite mineralization is at least 20 square kilometres in size. This Zone features very strong, coincident magnetic and gravimetric airborne anomalies, which show remarkable reliability as drilling targets. All 26 drill holes have encountered ore grade mineralization from 45 to 265 metres.

The average length of core intercepts of magnetite mineralization encountered in the 26 holes drilled in the Zone is 118 metres. This number is based on assays from 21, holes and the visual estimation of magnetite content in the remaining holes. It is important to note that a number of drill holes ended in mineralization, and consequently the mineralization is open at depth. The drilling depth will be extended in the 2012 season to delineate the increase in average thickness of the magnetite mineralization.

The average grade of the mineralization is 30.5% iron and the Davis Tube concentrate grades average 68.2% iron and 4.7% silica.

Specific Gravity ("SG") of 3.3 is used at this time, which is the same used for the surrounding deposits.

The mineralization starts near surface in most of the holes and is open in all directions

Block 103 -- "Northwest Zone" Discovery:

The "Northwest Zone" also on Block 103 was discovered from the 2011 drilling campaign. This second zone is flat lying, mostly near surface striking NE to SE approximately 2 kilometres west of the Green Bush Zone, in the northwest region of Block 103.

This zone was diamond drill tested by 6 holes over 5.3 kilometres of strike, with drill spacing ranging from 300 metres to 2,100 metres. The presumed width between Kivivic Lake and the western boundary of Block 103 is between 0.5 and 1.5 kilometres. The western and northern extensions appear to continue onto ground held by Tata Steel/New Millennium Iron Corp.