Winterhill Project

100% Paragon

Target: Volcanogenic Massive Sulphide (VMS) deposit (Cu, Pb, Zn, Ag, Au)

Highlights:

• Massive sulphides discovered at four prospects
• Up to 1.61% copper and 11.1% zinc over 4.0 metre (trenching)
• Up to 1.41% copper over 6.0 metres and 10.1% zinc over 4.0 metres (drilling)
• Over 3.5 kilometres of prospective strike length.
• Drill ready, excellent VMS potential in an under-explored volcano-sedimentary belt.

43-101 report on Winterhill property (2009)

Property Information

The 100%-owned Winterhill project is located on the south coast of Newfoundland, approximately 25 kilometres from the coastal community of Harbour Breton, NL. The property consists of 7 mineral licenses (170 claims) covering 4,250 hectares. The property is subject to a 0.5% NSR royalty. Previous exploration work identified massive sulphide mineralization at the Winterhill, Winterhill East, Winterhill West and Winterhill North prospects.

2010 Drilling at Winterhill VMS project

Geology and Mineralization

The property is underlain by Neoproterozoic volcanic and plutonic rocks similar to that of the Arabian-Nubian Shield, which hosts numerous large tonnage and high-grade VMS deposits. The property covers a 3.5 kilometre long zone of altered felsic volcanic and calcareous sedimentary rocks (Tickle Point Formation) that host a number of base metal prospects including Winterhill, Winterhill East, and Winterhill West. The Tickle Point Formation is variably intruded by felsic and mafic dykes/sills and is overlain by mafic volcanic and volcaniclastic rocks of the Connaigre Bay Group. Previous drilling by Noranda at the Winterhill prospects (18 drillholes, 3,872 metres) intersected massive sulphide mineralization with significant assays.

Winterhill Prospect

Winterhill - The Winterhill massive sulphide prospect is exposed for 120 metres on surface and measures from 5 to 15 metres in thickness. The mineralization consists of massive lenses, bands and disseminations of pyrite, sphalerite, chalcopyrite and galena hosted within calcareous chemical sediments and calc silicate rocks. The mineralization is characterized by an upper, 3 to 7 metre thick lead-zinc rich zone that is stratigraphically and structurally underlain by a less than 10 metre thick pyritic copper-rich zone. The footwall felsic fragmental rocks are characterized by strong silicification and lesser chloritization. The mineralized zone is overlain primarily by mafic volcanic rocks. A total of 8 drillholes were completed by Noranda at the Winterhill prospect with significant intercepts of 6.17% zinc over 11.0 metres (WH-90-11) and 1.41% copper over 6 metres from the copper-rich zone (WH-85-3).

Winterhill East - The Winterhill East prospect is located 1.8 kilometres northeast of the Winter Hill prospect and consists of semi-massive to massive pyrite-sphalerite-galena-chalcopyrite hosted by calc-silicate rock. A thin, massive and banded pyrite hosted by banded argillite occurs for about 1.0 km along strike to the northeast. Drilling at the Winterhill East prospect (3 drillholes) intersected 9.6 metres of massive, bedded pyrite (no base metal assays reported).

Winterhill West - The Winterhill West prospect, located 1.5 kilometres on strike to the southwest of the Winterhill prospect, hosts mineralization consisting of heavily disseminated to massive pyrite mineralization within silicified argillite. The silicified argillite extends along strike for an additional 1 kilometre to the southwest. A massive sulphide boulder assayed 4% copper in the vicinity of the showing. Drilling (1 drillhole) intersected four, 1.0 metre thick intervals of massive pyrite.

Winterhill North - The Winterhill North prospect, located approximately 600 metres north of Winterhill East, consists of magnetite-sphalerite-galena-chalcopyrite mineralization in boulders. Trenching in the area exposed a thick calc-silicate unit with one drillhole intersecting massive pyrite bands up to 1 metre thick. Two grab samples from the showing returned values of up to 2.2% zinc.

An airborne survey completed by Paragon has identified a least four priority short strike length airborne EM conductors that require follow-up prospecting and drill testing. A priority conductor in the Winterhill East area is located below a small lake and coincides with a conductive trend that continues on surface through the Winterhill East prospect. The best section of this airborne EM conductor occurs over about a 700 metres strike length making it a potentially large target.

Drilling in 2010 (1 drillhole, 300 metres) intersected a thick, strongly altered sequence of felsic volcanic rocks which contained intervals of well-bedded to banded semi-massive to massive pyrite mineralization measuring 3.8 metres (128.9-132.7 metres), 2.0 metres (183.3-185.3 metres) and 1.85 metres (199.45-201.3 metres) in thickness. Anomalous zinc is associated with the pyrite mineralization. The altered host felsic volcanic rocks are overlain by unaltered “hangingwall” mafic volcanic rocks.