Medallion Resources Ltd. - Quick Report

Medallion's Eden Rare-Earth Project explores for rare-earth elements (REE's) at one of North America's most prospective REE-enriched carbonatite complexes, located just east of Eden Lake in western Manitoba, Canada.

Medallion Resources Ltd focuses on the acquisition and advancement of significant properties containing the rare-earth elements (REE's), which are required for energy conservation, storage, use and efficiency. The REE's are key to many green, 21st-Century energy technologies, which are used in consumer and industrial products. Hybrid cars (in batteries, motors & generators) use several kilograms of REE's.

Modern wind generators each use up to 250 kilograms of REE's. New energy-efficient technologies, such as that found in already-operational magnetic heating, refrigeration and air-conditioning equipment, will further drive major markets for the REE's.

The Eden REE Project is Medallion's first in a series of REE acquisitions. Medallion plans to position itself, through acquisitions and the application of advanced exploration techniques, at the forefront of the REE exploration industry.

Eden Lake, Manitoba from the claims

The Eden REE Project is located on the east shore of Eden Lake in the Leaf Rapids district of Manitoba (project centred on 56o39'N Latitude, 100o9'W Longitude; search "Eden Lake, Manitoba" for Google Maps location). It is approximately 20 kilometres northwest of Leaf Rapids, Manitoba, and 170 kilometres northwest of Thompson, Manitoba (map to left). Thompson is the major service centre in western Manitoba. Project access is by float plane or helicopter from Thompson or Leaf Rapids. A ten-kilometre winter logging road connects the project claims with Highway 391 to the north. There is also boat access along the west edge of the claims via an Eden Lake dock on Highway 391. Hydroelectric power is available at Leaf Rapids to the south.

Topography is typical of glaciated central Canada. A few Rounded steep-sided north-trending ridges stand up to 60 metres above broad poorly drained valleys. Glacial debris fills valleys, covers hillsides and forms eskers and moraines. Rock outcrops are rare and restricted to the ridge tops.
This area is normally covered by dense boreal forests of jack pine, black spruce and balsam with occasional stands of birch, poplar and alder; however, recent fires and logging have opened up large areas for brushy new growth, berry bushes and meadow grasses. The large-animal population comprises black bear, moose, deer and wolf. Temperatures average 14o Celsius in summer and minus 23o Celsius in winter.

Medallion's Eden Rare-Earth Project controls the Eden Lake REE-rich carbonatite complex through an option ("Option") to earn a 65% interest in a joint venture to explore the carbonatite complex. The claims that cover the carbonatite complex ("Claims") are owned by Rare Element Resources Ltd ("RES"). These comprise eight crown mineral claims (1871 hectares) registered in the province of Manitoba.

In order to maintain Medallion's Option to earn a 65% interest in the Eden Lake-complex exploration joint venture, Medallion, over a five-year period, must complete the following cash and share payments to RES and complete the following Claim-exploration work-commitment expenditures:

Production from the claims is subject to a 3% Net Smelter Return royalty ("NSR"), which is in favour of the prospector that originally staked the claims. Half of this NSR may be purchased for $1.5 million.
Upon the completion the payments and work commitments, Medallion may exercise its Option to acquire its interest in a joint venture with RES, which will be created to explore the Claims (Medallion will hold 65% and RES will hold 35%). At that time, the Claims will be deeded to the joint venture.

Medallion will be the operator of the project during the Option period and, as the majority interest holder, it will be the operator of the joint-venture project, as well.

No unusual environmental, social or permitting situations are anticipated for the Eden Rare-Earth Project. Initial exploration work, which creates no significant disturbances, does not require a major permit. Drilling requires a more significant permit; however, applications and approvals for these are not onerous nor time consuming.

The large area around Eden Lake, including the Eden Rare-Earth Project, has been designated as a "rank 4" Area of Special Interest ("ASI") by the province of Manitoba. The "rank 4" ASI is the lowest-level administrative designation and it is used in areas of little, or no development to outline commercial-resource potential. It is not a precursor to "protected-area" status (ranks 1 through 3 are used as part of "protected-area" process) and it does not require any unusual actions or permits on the part of mineral explorers.

The "rank 4" ASI designation will actually assist with the organization of the normal local-community consultation processes that are required now for all exploration and mining projects in Canada. As the Eden Project exploration proceeds, Medallion intends to establish and maintain contact with provincial agencies and all interested parties to ensure that it complies with all appropriate environmental and social requirements.

There are no First Nations, Metis or aboriginal or other communities within or near the Eden REE Project claims. The area lies within the Marcel Colomb First Nation's area of community interest. Medallion Has met with the Marcel Colomb people and has established a good working relationship with them. There are no known endangered species within the Eden Lake ASI and there are no environmental organizations that have any unusual interest in the Eden REE Project claims or the Eden Lake ASI.

The Province of Manitoba has demonstrated a serious interest in assisting the exploration and mining community in its actions to comply with the technical, environmental and social standards of the industry. Manitoba has been selected by a poll of the mining industry as the second-best jurisdiction (among 72 worldwide) in which to explore for, and mine mineral resources (Fraser Institute's Annual Survey of Mining Companies 2008/2009). Medallion looks forward to working in mining-friendly Manitoba.

Location of the eight Eden REE Project Claims on the east side of Eden Lake
(Yellow pattern denotes areas where stone quarries are permissible and does not effect metal
exploration and mining projects)

Discovery of the Occurrence and Character of Rare-Earth Elements at Eden Lake

Rare-earth elements have been known at Eden Lake only since 1988, when detailed sampling by the Manitoba Energy and Mines Minerals Division discovered elevated levels of REE's in the core area of the Eden Project. At that time, the discovery was only of moderate interest because REE's were not thought to be of great importance. As with much of Manitoba, gold, nickel and base metals were of far more interest than REE's.

Gold continued to draw exploration interests to the Eden Lake area through the end of the century. The area was included as a high-priority target by the Manitoba Geological Survey in its province-wide search for Olympic Dam-type iron-oxide-copper-gold (IOCG) deposits. The alkalic nature of the host intrusive rocks, with elevated levels of REE's, is a key part of the IOCG exploration model.

The full characterization of the Eden Lake area as a major REE occurrence came in 2002, when REE-rich carbonatite intrusive rocks were discovered during an intense IOCG-exploration program. At the same time, more detailed high REE assays highlighted the widespread occurrence of REE's in pegmatite, hydrothermal veins and metasomatic replacements.

The early work on the REE occurrences, after their initial characterization, was hampered by the only moderate interest in the REE's. The owner of the claims at that time was not able to create enough market interest in the REE's to finance an all-out Eden Lake REE exploration program. The company even changed its name to reflect a new focus on more market-friendly nickel and base-metal projects. The last activity was a 2006 reconnaissance drill program of six shallow holes in one area of the claims. There was no follow-up or any attempt to explore the rest of the eight-square kilometres of intense mineralization. Many favourable REE targets have not been adequately tested. Additional exploration for yttrium and the more-valuable heavy REE's also is warranted.

Drs Tony Mariano (right) and Jim Clark (left), consulting REE mineralogists, on an outcrop of altered syenite in the western portion of the Eden Lake rare-earth property. The altered syenite (fenite) contains significant amounts of rare-earths over broad areas. Eden Lake is in the background.
Geology of the Carbonatite Complex

The area of the Eden REE Project is underlain by alkalic igneous rocks ranging in composition from early intermediate, mafic and ultramafic bodies to later potassium-feldspar-rich syenite and pegmatite bodies. The early, more mafic rocks are extensively altered, shattered and invaded by later syenite and pegmatite to produce complex veins, stockworks and blocky breccia.

Carbonatite, which hosts REE mineralization, is a rare type of igneous rock made up entirely, or to a great extent, of carbonate minerals. It is a key host of REE's around the world. At Eden, carbonatite dikes and plugs occur in close association with syenite and fenite (potassium) alteration. Various intrusive structures mapped during the 2002 field work indicate that a much larger carbonatite stock could lie below the eight-square kilometres of intense mineralization. The carbonatite is thought to predate the pegmatite and late hydrothermal alteration and deposition.

Alkali metasomatic alteration is pervasive. Early sodium alteration is followed by later stages including hematitization, potassium+sodium and potassium+carbonate alteration.

The chemical and physical properties of the REE's prevent them from occurring in common rocks, which results in REE concentrations in late-stage alkali-igneous rocks. These late stages include other reactive and volatile chemicals that alter and fracture the pre-existing rocks, into which they are injected. These late-stage "mineralizing" events are the processes that create ore deposits. Combinations of repetitive mineralizing processes create the maximum opportunities for concentrating ore minerals.

The Eden REE Project property contains a combination of four distinct styles of REE mineralization, which occur within an intensely altered and mineralized seven- to eight-square-kilometre area. They are all part of the intense late-stage REE concentration process that took place at the end of deposition of the alkalic igneous complex. These repetitive mineralization styles, listed in order of deposition, are as follows:

Carbonatite -- The carbonatite with fenite alteration, associated with late-stage
alkalic complexes, is a typical host rock for light rare-earth-element occurrences around the world. At the famous Mountain Pass, California mine and at Bear Lodge, Wyoming, the high-grade rare-earth-element mineralization occurs in the carbonatite rocks. This very positive relationship at Eden was confirmed in 2002 with assays of carbonatite returning total REE-oxide values of as high as 1.75%.

            Pegmatite -- Pegmatite is very coarse-grained and generally is the last rock to
form the remains of the liquid magma. Although generally relatively small, pegmatite deposits can contain high-grade REE mineralization. Their coarse-grain size and discrete structure allow easy mining and processing and, historically, they have been an important economic source of many minerals, including REE's. Pegmatite often is enriched in the more-valuable heavy REE's. At Eden, pegmatite forms dikes and sills up to five metres wide and several hundred metres long. The pegmatite contains the REE-bearing minerals andradite, allanite, britholite and apatite.
Hydrothermal veins -- Hyrothermal veins, breccias and stockworks result when
volatile fluids, left over from the last of the rock-forming processes, fill fractures and deposit quartz, carbonate minerals and any remaining metals. High-grade REE's do not commonly occur in hydrothermal systems; however, at Eden, hydrothermal veins have been sampled that contain up to 15% total REE oxides, the highest-grade Eden material found to date.   This is exceptional. These veins are targets for high-grade material, which could add significant grade to a potential ore body. The veins also contain up to 0.60% yttrium oxide, an indicator of potential heavy REE content.

Metasomatically altered host rock -- Through a process known as metasomatism,
hydrothermal fluids can permeate and alter pre-existing host rock, adding valuable minerals to its chemical composition. With other metals, such as gold and copper, altered host rock, impregnated with ore mineralization makes up the bulk of large--tonnage deposits. At Eden, significant REE enrichments occur in metasomatized syenite and ultra mafic, mafic and intermediate igneous rocks. This is an unusual occurrence for REE minerals and these metasomatized rocks are a major target for a potential large-tonnage deposit.

Drs Tony Mariano, Bill Bird and Jim Clark (left to right) examine a sample of high-grade rare-earth vein from the Eden Lake property, Medallion sample- and core-storage facility at Leaf Rapids, Manitoba, just south of the Eden Lake property.

With the recent REE discoveries and the early stage of work at Eden Lake, the opportunity for the definition of significant mineralization is exceptional. A two-phase program is needed to further this definition. The first-phase-program goal, which will be completed in 2010, is to locate drill targets throughout the 56-square-kilometre, intensely mineralized REE core area. These targets will focus on the following:

Collecting new-growth alder branches for geobotanical prospecting.
Anomalous strontium in alders may indicate buried Carbonatite.

The previous exploration work, particularly the 2002 discovery and characterization studies and the 2006 reconnaissance drilling, provide a good basis, including known untested targets, for this first phase of a new generation of work. The following steps and budget outline the program:

Gravity Survey
600 stations, ~100 x 200 m, main grid & SE extension               $ 60,000
Geological Surveys
Regional mapping                                                                               5,000
Sampling                                                                                 5,000
Line cutting; NW quad, SE ext, access trails                                   27,000
Detailed geological mapping and sampling NW quad,
SE extension, West grid detail, Main grid re-examination                              Mapping                                                                                26,000
Sampling                                                                               30,000
Satellite hyperspectral and pan-chromatic imaging; 200 km2,
Eden to Foot Lake
Purchase images                                                                    9,000
Satellite lineament structural analysis                                     3,000

Geobotanical Surveys
NW quad, SE extension over mag anomaly, West grid infill
Samplers                                                                               21,000
Samples                                                                                10,000
Supplies, reports, publications                                                                 10,000
Travel and per diem support
Air fare to Leaf rapids                                                                       15,000
Per Diem support                                                                              16,000
Helicopter support                                                                             10,000
Truck, boat and ATV rental                                                              15,000
Data compliation and report preparation                                                20,000
Project Management (on site)                                                                   30,000
Geoscience Support
Eden Lake rock property measurements:
Mag susceptibility, conductivity, chargeability, density       10,000
Hydrothermal Alteration and Mineralization Studies:
Mineralogy and mineral chemistry                                      10,000
Petrology and whole-rock geochemsitry                                         10,000
Analytical SEM and Electron Microprobe                                        6,600
Rare-earth expert consultants                                                         10,000
Core examination / sampling                                                            4,000

Medallion will need to raise additional funding to complete the first-phase Eden REE Project. The most expensive line item, the airborne geophysical survey, is already complete and funded. The first round of these fund-raising efforts is complete. Medallion has approximately $250,000 working capital. Funding for the remainder of the work, along with funding for additional Medallion REE property acquisitions, will be raised by private-placement equity sales during the spring of 2010. Funding is available through flow-through-share programs and Medallion expects to make use of this source.

Five-Year Option to earn a 65% interest	Cash payment	Medallion's common shares	Work completed
At signing of the letter of intent	$25,000
At signing of the definitive agreement	$25,000
Upon TSX Venture Exchange's approval	$50,000	200,000
End of first year	$50,000	200,000	$250,000
End of second year, an additional	$100,000	200,000	$500,000
End of third year, an additional	$200,000	200,000	$500,000
End of fourth year, an additional	$500,000	500,000	$500,000
End of fifth year, an additional	$500,000	500,000	$500,000
TOTAL	$1,450,000	1,800,000	$2,250,000