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Medallion is negotiating with a potential joint-venture partner to share the costs of the 2008 exploration program. Present plans call for an exploration program that will complete between 3,300 and 5,800 metres of drilling. The drilling and a US$100,000 advance royalty payment are due by the end of September 2008. The property is subject to a 3% net smelter return royalty. Property Details The Ocelot property comprises 155 unpatented federal lode mineral claims, covering approximately 3,100 acres, in Lander County, approximately 40 kilometres north of Austin, Nevada. Elko, Nevada, 162 kilometres to the northeast, has full services, including scheduled air service. The property is about 13 kilometres, by unimproved access road, from paved State Highway 305. A network of old exploration roads allows four-wheel-drive vehicles to traverse much of the property. The climate of the project area is typical of Nevada and the northern Great Basin. January temperatures average about minus one degree Celsius but can reach much lower. July temperatures average just above 21 degrees Celsius with highs in the 30s. Humidity and precipitation are very low. Greasewood and sagebrush are typical in the valleys and pinion pine, juniper and mountain mahogany occur on the mountain slopes. North-south-trending mountain ranges and intermontane basins characterize the area. The entire region is a closed-drainage system with all streams flowing to interior sinks. The terrain is moderate with local sheer cliffs. Elevations in the vicinity of the project range from 1,650 to 2,480 metres above sea level. Nevada is a mining state and well accustomed to mining. It generally ranks at, or near the top of any worldwide list as the political jurisdiction most favourable to the mining industry. The region surrounding the Ocelot property has a long history of mining activity. For mining projects, there is a relatively low risk of social disapproval. There are a number of active mines in the area and mining-related activities are a major component of the county's economy. Elko and Reno both have extensive support and equipment availability. Experienced manpower is readily available in the local area. Apart from mining, the principal land use in the area is cattle and sheep ranching. History The Ocelot area has been actively prospected since the mid 1800s, however no record remains for specific activity on the property. although there are Incomplete records for the past 30 years. The property was explored from 1986 to 1987 by Dome Exploration, which drilled 74 holes in the most obvious surface open-pit heap-leach targets. The best intercepts were three to five metres assaying approximately one gram of gold per tonne. There were also encountered several thick zones (greater than 13 metres) that assayed greater than 100 ppb gold. In 1989, US Borax made a detailed geologic map of the area and drilled three holes in an attempt to intersect a deep feeder zone. According to available information, the last work on the property was in 1990 by the Codex Syndicate, which made a geologic map but apparently did no drilling.  The property is at the intersection of the Austin -- Lovelock trend and the Crescent Valley lineament. The northwest-trending Austin -- Lovelock trend, which lies parallel to and west of the Eureka / Battle Mountain trend, is one of the major Nevada mineral-deposit trends. It is host to numerous epithermal deposits including Florida Canyon, Sleeper and Gold Banks, all of which contained at least two million ounces of gold. To the northeast of Ocelot along the north-northeast trending Crescent Valley lineament, the Pipeline deposit has reserves of greater than 15 million ounces. In the past 20 years, widespread surface silicification and anomalous gold values led several companies to explore the Ocelot area for shallow gold mineralization. Medallion's exploration plan calls for seeking the deeper, higher-grade mineralization of the epithermal quartz-adularia model, which is characterized by gold deposits such as Midas, Silver Cloud, and deeper portions of the Sleeper and Grassy Mountain deposits. The Ocelot exploration target is a typical epithermal-boiling zone within a hypothesized structurally controlled main feeder zone beneath the surface hot-springs deposits. Information collected from previous exploration, including mapping, sampling and drilling, has been used to locate this target area on the Ocelot property. The mapping, sampling and drilling was completed prior to the requirements of Canada NI 43-101; however, the apparent quality of this work, and the reputation of those that completed it, is such that Medallion is confident that this work is sufficient for use in developing the model and locating the target. Ocelot Geology Previous workers have mapped the property in detail. The oldest rocks exposed on the property are units of the Valmy formation. These include chert, quartzite, argillite, re-crystallized limestone and carbonaceous siltstone. The Valmy is part of the siliceous assemblage that has been thrust over equivalent-age carbonate rocks. The beds are locally intensely folded and, in places, contain abundant disseminated pyrite and stockwork quartz veins. Overlying the Valmy are several Tertiary volcanic and sedimentary units. These include rhyolite, intrusive andesite, lacustrine and fluvial deposits, and deposits mapped as silicious units and hot-springs sinters containing organic trash. This silicious unit, which is probably an alteration feature, includes hydrothermal breccia and silicified portions of various other rock types. The volcanic rocks appear to have originated from both regional and local sources� Also identified in the area but not seen on the claim block is an intrusive of diorite to granodiorite composition. Faulting is the primary structural element in the project area. The only folding observed is in the Valmy Formation, likely resulting from its emplacement as the upper plate of a thrust fault. Two directions of normal faulting are prevalent, north northeast-trending and west northwest-trending. The west northwest-trending faults are not well represented and are interpreted to be unimportant in the localization of mineralization The north-northeast-trending faults were apparently the active faults during the mineralizing event and are interpreted to have provided access for the mineralization. These faults are sub-parallel to the CVIL lineament. Further, the silicious unit is localized along these north-northeast faults Between two of the north-northeast faults, a graben structure has been interpreted that has localized an andesite plug or dike. It is this structure and this intrusive body that are hypothesized to be the feeder system for the mineralization. Geology map, area of the Ocelot property. The drill holes are proposed as part of the Phase One exploration program. Cross section AA is shown below. (From NI43-101 report by David Shaddrick and originally from report submitted to US Borax Inc.)  Mineralization Gold mineralization in this area is characterized by thick zones of 60 to 200 ppb gold, both in the deeper silicification and in rocks underlying the sinter units, which have been intersected in the drill holes. The strength of this mineralizing system is demonstrated by its consistent, highly anomalous gold values. Numerous holes contain two to four metres of mineralization greater than 335 ppb gold (0.01 ounces of gold per ton). Beneath the sinter unit, these intercepts are most often associated with silicified siltstone that contains microbreccia in small veins. This is typical of late-stage shallow gold mineralization above a zone of boiling. Similar intercepts occur in the deeper silicification and, although it is not documented on the drill logs, it is suspected that the higher-grade gold occurs in late-stage microveinlets cutting the earlier silicification. Accessory elements include minor silver and the typical pathfinder elements; Mercury, antimony and arsenic. � Mercury values are generally low (less than five ppm). Secondary arsenic minerals have been identified in the geological surface mapping and in the drill-hole logs. Base metals in this system, especially copper, appear to be slightly elevated Accompanying alteration is typical of epithermal systems associated with the quartz-adularia model. There are conspicuous massive siliceous deposits, which occupy higher topography. This siliceous alteration is characterized by wholesale replacement of the original rock with silica and, in some cases, chalcedony. This massive silicification is usually accompanied by various forms of brecciation. Multistage silicification and brecciation is evidenced by examples of brecciated quartz veins that are incorporated into later quartz veins and breccias. A second type of silicification, obvious surface sinters and silicified lacustrine tuff and sandstone, is present over the top and east of the hypothesized feeder structure (see Exploration Target below). This silicification defines the original paleo-surface and represents the later stages of hot-springs development. As the gold depositional event is usually a late stage of an epithermal system, the sinter marks the surface at the time of, or shortly before, the mineralizing event. Quartz Adularia Epithermal Exploration Model The geologic setting of the Ocelot Project is typical of the low-sulfidation, quartz-adularia epithermal exploration model and exhibits many of the features characteristic of active mining districts elsewhere in Nevada (Adularia is a potassium-feldspar product of hydrothermal alteration). Similar occurrences include the deposits at Sleeper, Midas, Mule Canyon, Aurora, Silver Cloud and Goldfield in Nevada and Grassy Mountain in Oregon. The characteristics include:
A second feature of the model is the definition of a structural feeder zone. At Ocelot this is believed to lie along the north-northeast-trending faults, which create a graben that places the Valmy against volcanic rocks. The deposit types expected are, therefore, structurally controlled vein and replacement deposits associated with both steep and low angle structures. Vein deposits will occur in the more brittle, non-reactive, sedimentary and volcanic rocks whereas the broad replacements will occur in, and adjacent to structures cutting the reactive or permeable sedimentary and volcanic rocks. Exploration Target The Ocelot exploration target is a typical epithermal boiling zone within a hypothesized structurally controlled main feeder zone. Information collected from previous exploration, including mapping, sampling and drilling, has been used to locate this target area on the Ocelot property. The mapping, sampling and drilling was completed prior to the requirements of Canada NI 43-101; however, the apparent quality of this work, and the reputation of those that completed it, is such that Medallion is confident that this work is sufficient for use in developing the model and locating the target. Where possible, drill-hole locations, mapped geology, mineralization and alteration have been verified in the field. Prior to drilling, Medallion will test and refine the data with data from its own exploration program. As work progresses and new drilling approaches the hypothesized feeder zone, Medallion expects to identify the following characteristics:
 Cross section AA through a portion of the previous geology map. The drill holes are proposed as part of the Phase One exploration program (from NI43-101 report by David Shaddrick). Exploration Program The Ocelot property is in the exploration stage; however, the large body of existing work and a focused exploration model with an attendant drilling target has advanced the property beyond the grass-roots stage. This property has exploration merit and further exploration is definitely justified. The Phase One exploration program will test the interpreted feeder zone at depth and along strike. It will consist of a preliminary geophysical survey to aid in identification of the main feeder zone followed by 5,000 feet of reverse circulation drilling. Activities and cost estimates for this phase of the work are detailed as follows: Ocelot Property Phase One Program and Budget (US$).
If the results of Phase One warrant additional work, a second exploration phase will consist of significant additional drilling. Details of the program will be contingent on the results of phase one but can be expected to include approximately _____________metres of resource-definition drilling and initial testing of new targets. This program is expected to cost in the range of US$1.8 million to US$2.0 million. Detailed planning and costing for Phase Two will be part of a comprehensive report detailing the activities and results of the Phase One program. |
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