Interview with John Archibald, VP of Exploration for Vanity Capital Inc.

Can you tell me more about the history of Vanity Capital’s newly optioned Porcupine property and where it is located?

It’s located south of the Beattie mining Concession 292 and west of the Donchester mining Concession 484. These are in the municipality of Duparquet, roughly 30 kilometers northwest of Rouyn-Noranda, Quebec. If you look it up on the First Mining Finance website, you can see the latest resource calculations for the Beattie and Donchester. It’s a mining area that’s adjacent to the Porcupine-Destor fault, which is one of the main gold-bearing structures running between Timmins and Val d’Or. They’ve produced close to 80 million ounces of gold within that structure or from splays (branches) coming off of it. The goal of our exploration work is to look for and find gold mineralization which is consistent with what has already been found at those adjacent properties.

At the Beattie, they produced roughly 1.2 million ounces of gold between 1933 and 1956. Then the mine closed down in 1956 due to the low price of gold. Clifton Star Resources, later in partnership with Osisko, spent four or five years delineating and grading the resources on the Beattie and Donchester concessions. Also, adjoining these properties is another mineralized occurence, the Central Duparquet mine, which had an updated resource in 2011. The Vanity Capital property is along strike and covers a portion of the Central Duparquet fault. It also covers the area connecting this splay and the Porcupine-Destor fault as well as covering a portion of the fault itself.

Does the Donchester also have a past producing history?

Yes, the Donchester produced roughly 300,000 ounces. It was what we called the south zone but within the Donchester fault. Everything is fault controlled, and most of the best host rocks are within syenite porphyry.

The name of the Porcupine property — it is called the Porcupine East Block, is that right?

I just know it as the Porcupine Block or Porcupine-Duparquet block. It consists of ten claims that were optioned from IAMGOLD.

What other mines are in the area, close to the Porcupine?

To the west, about 20 kilometers away in Ontario there’s a property known as the Holt (previously, Holt-McDermott) mine, owned by Kirkland Resources. It used to be St. Andrew’s property and before them, owned by Newmont and Barrick. Another one is the Harker Holloway. Both have similar ore to that found at the Beattie. They have a mill there. I believe it’s a 3,500 ton-per-day mill. I don’t know exactly how much gold they have produced, but it’s in a range of around 1 million ounces, and it’s still operating, by the way. And then to the west of that is Primero’s Black Fox and they’ve just completed their open pit and they’re going underground, now. And it’s again along the Porcupine-Destor fault and along a series of splays coming off that fault.

The latest gold property along the Porcupine-Destor was taken over by Oban Resources which is now Osisko Gold Royalties Ltd. and John Burzynski. It’s situated between the St. Andrews and the Black Fox. And as you go further west, you get into a whole slew of Timmins producers.

To the east, the Porcupine-Destor splays southwesterly into the Malartic Complex along the Cadillac Break and extends further east onto Val d’Or.

Getting back to the Porcupine, what type of mineralization is found in the area and are you hoping to find?

It’s mainly very fine disseminated pyrite. And the gold is actually associated with the pyrite. There are areas that are arsenopyrite bearing but it’s not pervasive. The amount of arsenopyrite is generally under half a percent. We call it refractory ore because the gold is very finely disseminated in a silicious ore. And we’ve done metallurgical studies on the different showings in the area. Metallurgy right now for the Beattie-Donchester is plus 90 percent recoverable. We actually have seen recoveries up to 98 to 99 percent using high-pressure oxidation combined with the carbonated pulp methods used in the past.

And then in the surrounding area there are at least six to nine mills that can process refractory ore, and the closest one is at the Horne mine in Noranda, about 30 kilometers away. The St. Andrews mill next door in Ontario could also process that material.

Tell me about the project as it is progressing now. What is the scope of work, number of drill holes, type and depth of holes, etc.?

It’s a two phase program, first of all to sample surface showings. There are several of them that have shown up. One of these is, again, a syenite complex, highly brecciated, with fine disseminated mineralization and it appears to be along  strike of the Central Duparquet occurrence. And then there’s another showing which is in a fuchshite-rich metasediment and again there the fuchshite is associated with gold bearing zones within ultramafics nearby.

The metasediment rocks we see on surface are fucshite-rich, and highly silicified. These zones may indicate that there are ultramafic complexes close to these units. Historically, the fuchshite is associated with gold. The first phase of the drill program includes five drill holes. Some are placed to intersect cross cutting structures, and then others would be to trace units that we see on surface, down dip and along strike.

What about the second phase?

The second phase would be to follow up on the results of the first phase. The plan for the second phase would be to probably drill some of these structures to depth underneath. It would appear that the structures and mineralization get stronger at depth. We know this to be true, since this is historically consistent with the Beattie-Donchester area.

Another possibility we are contemplating is to drill within the Porcupine-Destor fault and try to get across both contacts. Historically, there are zones that are found within the Porcupine-Destor fault and along its sheared contacts.

How close is the drilling to the actual fault?

How close to the Porcupine-Destor? It’s a couple hundred meters away. The fault itself has a width of about 100-150 meters. There is a strong deformation zone that will be found outside of the Porcupine-Destor fault, and it’s associated with these cross-faulting structures. So again, within them we see the types of ingredients we need for gold emplacement.

How deep are you going?

The first phase is a bit shallow; it’s 250 to 300 meters in depth. And then the second phase would actually be drilling deeper. Once we understand the structures and which way they dip and strike, we drill them accordingly. So, historically, the gold-bearing structures generally plunge steeply east at 60 degrees and we don’t know whether this structure will actually dip into the Porcupine-Destor or dip into one of the other splays we are finding – such as the Beattie-Donchester fault.

Is it safe to say that you’re looking for evidence of a deposit which consists of similar material to that found at the surrounding past producing mines, such as at the Beattie-Donchester?

Absolutely. The main host rock for gold is the syenite porphyry intrusive. The secondary source is the mineralization that has been found within the mafic volcanic units. And so we’re intersecting both so we don’t miss anything. Just to give you an idea, the Beattie fault main zone produced 1.2 million ounces in the past. It was mined along a strike length of about 600 meters. But, in the last few years we’ve extended that to a total of about 3,600 meters.

And then in the Donchester mine within the Donchester fault, I think they took out about 300,000 ounces and it was along a strike length of approximately 400 meters. The Donchester, at the main Donchester fault zone, has been extended to about the same 3,600 meters. And it’s still open at length and to depth.

My understanding in looking at the location map is that the Porcupine property is close to the Donchester property boundary.

The Donchester property boundary abuts the east side of the Porcupine claim group, and the Beattie property abuts the north side.

Can you comment any further on the goals for this drill program and where it’s going from here?

Well, the goals are to intersect some of the known fault zones crossing the property and also to drill into the Porcupine-Destor fault to see if there are other zones associated with the main fault. Nobody has drilled on the south side of the Porcupine-Destor fault but we know there is potential as shown on the properties that are drilling in Ontario to the west. They’re finding gold mineralization on both sides of the fault, including within the Porcupine-Destor fault.

Anything else you’d like to add about this?

We’ve been able to get a better idea of the geology and certainly the size of the deformation zone where we expect to find gold values. The fact that we are actually finding the syenite porphyry on the property is very significant.

Good. Of course I am rooting for the success of this project. It’s a story which is evolving.

Yes. It’s a nice gold camp and I think the Beattie was the first million ounce producer of gold in Canada for its time. Again, the zones are still open. What we’d like to see is a continuation of drilling of those zones. Beginning with the Beattie north zone, a series of seven other parallel zones were found. So we’re hoping to find even more in the future as we drill into the Porcupine block.

John, tell me about your background.

I graduated with a degree in Geology from Carleton University in Ottawa. I have over 38 years work experience in the mining and exploration field, environmental sampling/auditing, consulting, writing technical reports, and supervising field exploration programs. I have sat on a number of boards as a director, CEO, and as a technical expert. I have worked with a number of mining and resource companies including Noranda Exploration, Homestake Resource Corporation, Au Placer, Globex Minerals, Kennecott Exploration, and some of the lesser known exploration companies such as Vencan Gold, Vega Explorations, Noront Resources, and Cadillac Ventures, to name a few.

What was your involvement with Clifton Star Resources?

In 2007, Harry Miller, CEO, and Nick Segounis, a director, met with me to assist in securing an option on the Duquesne Mine next door to the Beattie-Donchester. As I was engaged, I introduced them to my brother, Fred Archibald, a geologist who had kept the property in good standing for the owners. Fred subsequently became VP of Exploration for Clifton Star. After some drilling the resource was expanded by some 100K oz. of gold. Shortly after that an option was negotiated on the Beattie-Donchester. After an extensive drilling program, Osisko Resources, believing the property was similar to their flagship Malarctic property, negotiated an earn-in option and spent 20 million dollars in an exploration program, only to discover that the resource was more complex than initially thought. New management of Clifton Star failed to renegotiate new terms with the property owner and the company lost the property save for a 10% ownership. The company was subsequently acquired by First Mining Financial.

So, the Beattie-Donchester has open pit potential as well as underground potential, more of an open pit emphasis at the moment because of the price of gold. The resources are still wide open. They need to be drilled off and a larger reserve picture completed. We have all gained substantial experience regarding the Beattie-Donchester area where Clifton Star’s project, and now the Porcupine project, is located.

Let’s wrap this up. How would you summarize the big picture of what you’re trying to accomplish at the Porcupine project? What would you like to say to investors and newcomers to the Porcupine story?

To summarize, we are exploring the Porcupine property which is next to the Beattie-Donchester, a prolific, past producing mining area with millions of ounces of remaining gold resources. The Porcupine is also very close to the Porcupine-Destor fault. Major faults are known to be associated with gold mines, and some 80 million ounces have been found along the Porcupine-Destor. The goal of our work is to test and confirm the hypothesis that similar geology and gold mineralization extends onto the Porcupine property, and to find that mineralization by further drilling.

Thank you, John.