Pil Property

The Pil property is the company's largest holding covering 15,983 hectares (160 sq km). It covers an area prospective for porphyry copper-molybdenum-gold and epithermal gold-silver deposits. Finlay Minerals acquired the Pil claims pursuant to a Purchase Agreement with Electrum Resource Corporation dated July 29, 1999. Electrum is a private company owned 60% by John J. Barakso who is a director of the Company and 40% by members of his family. As part of the purchase consideration, the Company granted Electrum a 3% net smelter returns royalty.

The property is located in the Toodoggone region of northern British Columbia. Co-ordinates (Pil camp) are 57 20' north Latitude and 126 57' west Longitude on N.T.S. Map No. 94E/7W. It is located 460 kilometres by air north of Prince George and 39 kilometres north northwest of Northgate Mineral's Kemess copper-gold mine. Access to the property is by road from Prince George, a distance of ~600 kilometres and a drive of approximately 12 hours. Access to the Kemess mine airstrip is by charter plane from Prince George, Smithers, Kelowna and Vancouver. A power line links the nearby Kemess Mine to the provincial electrical grid. Mineral concentrates from the Kemess Mine are trucked out to the railhead at Mackenzie.

Regional History

Exploration in the region dates back to the early 1900s during the search for placer gold prompted by placer gold discoveries in the Germansen, Manson Creek and McConnell Creek areas. Intensive exploration in the region commenced in the late 1960s, by Cominco and Kennco Exploration on numerous large gossanous zones representing epithermal and porphyry copper-gold targets. These and the Pil property are situated within a region of mineral prospects and mines known as the Toodoggone mining camp. Exploration activity peaked through the late 1970s and the 1980s and culminated in the construction of the Baker and Cheni gold-silver mines.

In the early 1990s the Kemess property was acquired by Royal Oak Mines and brought into production in 1998. In February 2000 after the bankruptcy of Royal Oak Mines, Northgate Minerals acquired a 95% royalty interest in the Kemess Mine and associated exploration properties for US$180 million. Since then Northgate has upgraded the mine and mill and improved operating efficiency. Northgate has conducted intensive drilling on the Kemess North porphyry copper-gold deposit since 2000. A mine feasibility study was completed in October 2004 and federal-provincial environmental reviews for this deposit are currently underway. The reported mineable resource at Kemess North, as of September 22, 2003, was 369 million tonnes grading 0.18% copper and 0.34g/t gold.

Pil Property History

During the period 1968 through 1987, several operators explored mineral claims that included parts of what is now the Pil Project. From 1992 through 1998 Electrum owned and explored the Pil Property. Exploration work from 1968 through 1998 included geochemical and geophysical surveys, minor hand trenching and geological mapping.

Finlay acquired the Pil Project from Electrum in 1999 and has since conducted extensive grid based soil and geophysical surveys, geological mapping, constructed access roads and drilling. Since 2003 the company has completed 42 drill holes totaling 9,665 metres.

Exploration on the Pil property is summarized as follows:

Geology and Mineralization

The Pil property is situated in the Toodoggone mining district, a mineral rich belt that hosts numerous porphyry (Cu-Au) and epithermal (Au-Ag) deposits. Several of these deposits are former producers and two, namely Kemess and Baker are in production.

Geologically the Pil property is situated within the eastern margin of the Intermontane Belt, a northwest trending assemblage of Paleozoic to Tertiary sediments, volcanics and intrusions covering an area of 90 by 25 kilometres. The district comprises Early Jurassic Hazelton Group rocks represented by the Toodoggone Formation calc-alkaline volcanics, as well as coeval plutonic and sub-volcanic intrusive rocks (Black Lake Intrusions). Toodoggone rocks exceeding 2,200 metres in thickness unconformably overlie submarine sedimentary and igneous arc rocks of the Permian Asitka and Upper Triassic Takla Groups, which are unconformably capped by Cretaceous age continental sediments of the Sustut Group.

Structurally the district is dominated by steep dipping block faulting and half-graben tectonics that defines a prominent northwest trending structural fabric. These structures are important controls in the emplacement of the plutons and the eruption of the Toodoggone Formation volcanics. The faults also localized epithermal gold and silver mineralization such as at the Lawyers deposit and the Baker Mine. A number of porphyry copper-gold deposits, including the Kemess South Mine and the Kemess North deposit are related to the Black Lake intrusive rocks.

On the Pil property mapping (R. Brown, G. Ray, et al) indicates that most of mineralized zones are predominantly underlain by altered monzonitic and dioritic rocks of the Black Lake Intrusive Suite. Most of these zones occur within large rusty zones or "gossans". The Atlas East Zone is underlain by Toodoggone volcanic rocks however there is evidence of nearby and possibly underlying intrusions. The Pil South Zone is underlain by Takla and Toodoggone volcanics as well as Black Lake intrusives. The property is dominated by structures related to the northwest trending "Pillar Fault". Splay and conjugate structures occur throughout the property.

Exploration has delineated a number of mineralized zones on the Pil property. These are from north to south referred to as the NW, Silver Ridge (Milky Creek), NE, WG, Central, Atlas and Pil South Zones. Currently the highest priority exploration targets are the Atlas and Northwest Zones.

Atlas East Zone:

Atlas East Zone Click on the picture to see a larger version.

Atlas East high-grade bedrock (Sample RMR06-A07); 489 g/t Au, 6514 g/t Ag) Click on the picture to see a larger version.

ATLAS EAST MINERALIZED ZONES Click on the picture to see a larger version.

The Atlas East Zone has emerged as a new and very exciting epithermal gold-silver exploration target. Native gold and silver sulphides (argentite) along with minor amounts of chalcopyrite, galena and sphalerite occur in bedrock and float. Bedrock samples grading up to 33 g/t gold and 482 g/t silver and quartz vein float grading up to 72.5 g/t gold and 2187 g/t silver were discovered in 2005. In 2006 brecciated and silicified bedrock yielded 489 g/t gold and 6514 g/t silver and quartz vein float grading to 72.5g/t gold and 2187 g/t silver have been discovered. Mineralized float is considered to be very near the bedrock source. Mineralization occurs in silicified zones, quartz stockwork veining, and breccia associated with a prominent gossan hosted by pyritic andesite (see Atlas East photo).

The table below highlights some of the noteworthy mineralization.

Drilling in 2006 intersected significant precious metal mineralization in three holes. Two of these contained visible gold and argentite. The following table highlights the drilling results.

Equivalent Thorium/Potassium Click on the picture to see a larger version.

DDH	From (m)	To (m)	Width  (m)	Au (g/t)	Ag (g/t)
* A06-05	124.05	132.45	8.40	2.18	28.4
includes	124.05	124.05	1.05	13.35	158.0
includes	131.35	132.45	1.10	2.26	10.4
	138.00	142.00	4.00	2.46	31.4
includes	140.00	142.00	2.00	4.59	60.0
A06-10	16.50	23.45	6.95	1.55	35.3
includes	18.00	18.60	0.60	14.18	272.7
	22.55	23.45	0.90	1.70	16.0
A06-12	26.50	28.00	1.50	0.71	25.8
includes	27.25	28.00	0.75	1.18	33.0
	101.05	107.00	5.95	2.12	113.5
includes	101.05	101.95	0.90	1.47	50.1
includes	101.95	103.00	1.05	9.18	361.2
	119.25	126.35	7.10	1.50	38.8
includes	120.70	121.50	0.80	4.26	110.3
includes	124.80	126.35	1.55	3.00	59.9
* indicates interval containing gold, electrum and acanthite

ATLAS AND PILLAR EAST ZONES - Geochemical Plan - Gold (Soil, Stream and Rock) Click on the picture to see a larger version.

ATLAS EAST MINERALIZED ZONES Click on the picture to see a larger version.

Exploration since 2005 has traced mineralization over an area of 550 metres east-west by over 200 metres north-south.

In late 2006 stream sampling further east the current exploration area yielded gold concentrations much greater than that found downstream of Atlas East. This discovery expands the east-west potential to nearly two kilometres. Interestingly the 2004 Toodoggone airborne survey reveals the Atlas East Zone to coincide with the north boundary of a very large thorium/potassium anomaly nearly three kilometres across. Such anomalies have been demonstrated to signify the presence of mineral deposits. Follow up of this area will be a top priority of the 2007 exploration program.

NW Zone:

Looking south over Northwest Zone and 2006 drilling Click on the picture to see a larger version.

Drilling in 2004-2005 identified porphyry significant copper-molybdenum mineralization in the NW Zone. In 2004, drill hole PN04-09 intersected approximately 300 metres of mineralization with a 168 metre interval grading 0.09% copper (Cu) and 0.004% molybdenum (Mo). Mineralization is associated with silicified, variably quartz veined and brecciated quartz diorite and monzonite that has thus far been traced over an area of 400 by 400 metres. In 2005, drill holes PN05-01, 02, and 09 were drilled as step out holes aimed at testing the extent of the mineralization. The farthest step out holes (PN05-02, 09) located 300+ m from PN04-09 intersected mineralization. Hole PN05-02 intersected 65.1m grading 0.140% Cu and 0.004% Mo while PN05-09 intersected several zones with 155 metres containing 0.064% Cu and 0.002 % Mo. Interestingly, the last 1.70 metres of the hole contains 0.154% Cu, 0.013% Mo along with 88 ppm tungsten, and 0.46% zinc. The NW Zone is open to the north, west and to depth.

In 2006 two holes (PN06-01, 02) were drilled the first of which tested the area west and beneath Hole PN05-02. The second hole targeted the western and possibly down dropped portion of the NW Zone along a prominent north-south fault zone. Hole PN06-01 intersected 34 metres of very altered and pyritic intrusive rocks containing anomalous copper within which 16 metres grades 3.2 g/t silver. PN06-02 ended in a prominent tectonic breccia likely representing a major fault. Deepening of these holes is planned.

Silver Ridge Zone:

Silver Ridge Zone - looking NW Click on the picture to see a larger version.

Exploration has revealed the Silver Ridge Zone is a north-northwest trending structural feature manifested by a five kilometre long by 500-metre wide silver-gold-lead-zinc soil geochemical anomaly. Electromagnetic surveys and mapping reveal the zone comprises of a series of parallel shears and silicified zones many of which are mineralized.

In 2004 a significant mineralized zone was encountered in the Silver Ridge Zone where drill hole PN04-06 yielded a 2.4 metre core length containing 1,235 g/t silver along with anomalous amounts of copper, tungsten and zinc. This intersection came from the end of the hole that was terminated due to technical difficulties in a zone of highly fractured rock. Similar lower grade mineralization was also intersected in two holes situated 0.8 and 1.95 km north-northwest respectively. In 2005 the high-grade silver mineralization intersected in hole PN04-06 was tested by a twin hole - PN05-10. This hole yielded a 2.30-metre interval grading 6.8 g/t silver associated with a shear zone and a 7.60-metre interval containing 1.05 g/t gold. Most of this hole contains anomalous tungsten and zinc, a geochemical signature commonly seen along the Silver Ridge Zone. Extreme technical difficulties due to a very unstable fault zone did not allow the completion of the hole.

Also during 2005 in an area referred to as the Silver Ridge North Zone, drill hole PN05-03 tested a strong gold and silver soil anomaly. The hole intersected a shear zone with 2.0 metres grading 1.47 g/t gold and 57.5 g/t silver. At increasing depth, the hole intersected zones up to 68 metres wide consisting of strongly altered and pyritic intrusive rocks (halo?) that grade with depth into silicified and brecciated monzonite. A 60.3-metre section near the bottom of the hole contains sporadic, anomalous copper along with 24 ppm tungsten and 0.13% zinc. It was apparent that PN05-03 intersected Silver Ridge type mineralized structures but unexpectedly bottomed in what appears to be a mineralized porphyry system. Drill hole PN05-08, a 100-metre southerly step out from PN05-03, bottomed in similar, but less extensive, tungsten-zinc mineralization. The halo of very altered rocks encountered in both holes and the underlying tungsten-zinc mineralized intrusive rocks may be evidence of a deeper or lateral expression of a porphyry system. Drilling is proposed further north in 2006 to determine whether Silver Ridge North and the NW Zones are part of a much larger porphyry system.

Pil South Zone:

The Pil South Zone is underlain by Takla and Toodoggone volcanics as well as Black Lake intrusives. Mineralization on Pil South consists of 1) widespread quartz vein and veinlets containing various combinations of copper, gold, zinc, lead and silver mineralization 2) disseminated sulphides, comprised of a few percent pyrite with traces of copper minerals, containing copper and zinc ranging to hundreds of ppm and gold in the tens of ppb. This disseminated sulphide mineralization, while not approaching ore grade, is a favourable indicator that a porphyry-style mineralizing system may exist at Pil South. Zones of intense quartz-chlorite alteration occur within the Takla volcanics, of which Lorne's Showing is the best example. There, a northwest-trending fault zone which probably controls the zone of quartz-chlorite alteration was traced along strike for 10 meters. Its full strike extent is unclear as it is obscured by talus. The highest grade sample from the showing, a continuous chip sample across 21 centimetres contained 17,345 ppm or 1.73% copper. Continuous chip samples collected over 5 metre intervals along the length of a hand trench yielded copper ranging 174 to 3782 ppm copper. None of the samples can be considered to represent a true width.

In 2003 a drilling program of four holes (707m) was conducted with the target being coincident geochemical and geophysical anomalies. Drilling did not encounter porphyry copper mineralization however not all holes were able to achieve their target depth.