Prime Meridian Resources Corp. - Baraga Basin

Overview Regional Geology Baraga Basin Kiernan Wilson Creek Winterfire Bangston Mid Stage Properties

Overview
In the Baraga Basin Project Area Prime Meridian has mineral land tenure on seven targets prospective for magmatic nickel-copper deposits associated with the Midcontinent Rift System (MRS). Three of these are drill-ready, and three of these are within a four kilometre radius of Rio Tinto's Eagle deposit, discovered in 2002. Rio Tinto has announced that Eagle contains a reserve of 5.2 million tons at a grade of 3.68% nickel, 3.06% copper, 0.1% cobalt, with platinum group and gold values. As of January 2008, Rio Tinto has received all permits needed to begin construction and mining this deposit.

Prime Meridian's current targets were defined by electromagnetic, magnetic and gravity surveys. The company plans to begin drill testing these targets beginning in early 2008. Each target has the potential to deliver a significant discovery based on geological and geophysical similarities of its targets with the example nickel-copper deposit nearby at Eagle.

Project description, location and land tenure
This Project Area is located within a 760 square kilometre region of Baraga and Marquette Counties in northern Michigan. The favorability of this part of the MRS terrane is clearly evidenced by the existence of the Eagle deposit within it. Prime Meridian is in direct competition here with Rio Tinto's subsidiary, Kennecott Exploration Company. Prime Meridian's land position at the Baraga Basin Project, totaling slightly over 4,000 mineral hectares, is the largest in the company's portfolio. Its lands are held principally by a number of 100% mineral interest leases, and in a few cases, by outright purchases of fractional mineral rights interests from various owners.

Area Infrastructure
This Project Area is located in a sparsely populated section of Baraga and Marquette Counties in the upper peninsula of Michigan. There are no paved roads within the Project Area itself, but U. S. Highway 41/28 borders its southern and western margins and provides access via a network of unpaved logging roads. The nearest towns are L'Anse, population 2107, located on Keweenaw Bay in the western part of the Project Area, and Big Bay, population 260, located 6 miles east of the Project Area. The nearest substantial population centre is Marquette, a port city located approximately 40 road kilometres to the southeast on the shore of Lake Superior. Marquette has approximately 30,000 residents, and has been a major industrial centre for the iron mining industry for over 100 years.

Geology
Regional Geology

Project Geology

Baraga Basin Geology

"Baraga Basin" is an informal name that refers to a structural trough filled by Proterozoic Michigamme Formation metasediments of the Marquette Range Supergroup. Because of thick Pleistocene glacial sediment cover in the basin, there are few surface exposures of the Michigamme Formation rocks, which in outcrop are mostly black slate (often sulfide-bearing) and argillite. However, drill core obtained by the Michigan Department of Natural Resources along the southern flank of the basin indicate that conglomerate, quartzite and arkose underlie the black slate and argillite. All of these are regionally metamorphosed to greenschist facies.

Younger Keweenawan-age mafic igneous bodies intrude the Michigamme Formation. The Yellow Dog peridotite dike is the best known of these intrusions because of two outcrops that were studied by the U. S. Geological Survey (USGS) in 1979, and because the Yellow Dog peridotite is the host rock for the Eagle deposit. Its two outcrops correspond with the highest peaks of an east-west aeromagnetic anomaly that is approximately 22 kilometres long. Linear aeromagnetic anomalies of comparable magnitude parallel it just to the south; however, past drilling by Prime Meridian suggests that these other magnetic highs represent pyrrhotitic metasediments rather than intrusions.

Structural geology has been primarily interpreted from regional magnetic surveys. Northwest striking features cross-cut and horizontally displace the general west-northwest strike of the metasedimentary stratigraphy. These are cut and horizontally displaced by younger northeast-striking structures. The northeast faults also displace the Yellow Dog dike and are therefore late or post-Keweenawan in age.

History
The 1979 USGS report focused on the geology, petrology and geochemistry of the Yellow Dog intrusion. Ground geophysical surveys that included gravity, magnetics and VLF-EM were done along the postulated 22 kilometre east-west extent of the intrusion. Based on its anomalous base metal geochemistry and positive EM anomalies, the USGS report concluded that the Yellow Dog peridotite was a potential host for nickel-copper mineralization.

Kennecott recognized this potential and began an exploration program in the 1990's, focused on the Yellow Dog peridotite. In 2002, in the first hole of a second round of drilling, Kennecott intersected 84.2 meters of massive sulfide mineralization averaging 6.3% nickel and 4.0% copper. The top of the orebody that Kennecott eventually outlined by subsequent intensive drilling lies some 100 meters below the outcrop. In February 2006, Kennecott began submission of applications for mining permits; it received the last of the needed permits in January, 2008.

Prime Meridian's Exploration Program

2007 Heliborne Survey - Baraga Basin

Baraga Basin drilling (2004)

Baraga Basin, example of drill target with magnetic high and coincident conductors

In 2002 Prime Meridian conducted geological reconnaissance mapping and sampling on mineral lease areas in the Baraga Basin, and entered into a joint venture with BHP-Billiton Minerals Exploration Inc. (BHPB) to explore for magmatic intrusion-hosted nickel-copper deposits in the Baraga Basin, Bangston and Kiernan Sills Project Areas. In 2003 the joint venture partners flew electromagnetic and magnetic surveys over the joint venture areas. Drill testing was needed to evaluate and understand the survey results. Seven targets were drilled in 2003 without significant results, which established the need for additional geophysical techniques to identify and prioritize targets. In 2004 an airborne gravity survey using BHPB's proprietary Falcon system was flown over the eastern portion of the Baraga Basin Project Area. Additional surveys were flown in mid-2005, but their results did not become available until after the joint venture was terminated that year. Meantime, in late 2004, three more Prime Meridian targets were drill tested. At two of them, the core drilling successfully intersected olivine gabbro intrusive rock types. Unfortunately, economic mineralization was not found in either of these mafic bedrock bodies.

Current Plans
The airborne surveys, taken together with the 2003-4 drill testing results which assisted in interpreting the geophysical responses, identified a number of new high priority targets on Prime Meridian's mineral lands. The company did confirmation ground geophysical surveying on two of these in late 2007, and intends to begin drill testing them in 2008, while continuing ground geophysical confirmations on more of them as seasonal conditions permit.

In February drilling began on the Jake target on a Keweenawan-aged dike trend, where outcrops of gabbro lie adjacent to combined magnetic-EM anomalies that follow the dike trend.

PMR has additional high priority targets that exhibit magnetic anomalies, in combination with one or both of gravity/EM anomalies on trend with the Eagle Deposit.