RECONNAISSANCE GEOLOGICAL SURVEY OF THE MANGANESE AND COPPER PROSPECTS
of EXPA00138-V

Brgys. Pamangpangon & Casamongan Milagros, Masbate Island Philippines

I.0 SUMMARY
 

A rapid reconnaissance geological survey was conducted in Brgys. Pamangpangon and Casamongan, Milagros, Masbate Island covering the Milagros mining claim areas of Uni-Dragon Mining Development Corp. Under EXPA 00138-v with an area of 7,825 hectares more or less, the study area covered 3,000 hectares more or less. It is centered at geographic coordinates 12º 06’ 54.7” north latitude and 123º 18’ 36.6” east longitude and lies approximately 34km southwest of the highly prospective Milagros manganese province. The fieldwork conducted during the period September 11 to 16, 2008, covered a study area of 3,000 hectares more or less.

The purpose of the reconnaissance geological survey was to: 1) delineate and establish the stratigraphic relationships of the different lithologic units or formations; 2) ascertain the existence, nature, and the mode of occurrence of the manganese and copper deposits; and 3) delimit the geologic structures and host rocks responsible for the ore deposition of metallic sulfides. In order to understand clearly the stratigraphy and mode of occurrence of the manganese deposit and associated copper mineralization, the field investigation was carried out not only within the claim area but also beyond its boundary limit. The fieldwork consisted of geological mapping along the drainage systems, existing foot-trails, and old logging roads. In addition, rock sampling of the mineralized outcrops was undertaken and submitted for assay analysis.

The reconnaissance geological survey found a significant manganese deposit in the area. The lithostratigraphic control is the association of manganese with spilitic basalt and intercalated chert-jasper interbeds. The manganese ore zones are disposed along NE trending lineaments/shear zones parallel to the direction of the major thrust fault located north of the study area. The manganese deposits are tabular, lenticular masses with pocket bodies occurring along definite or in several horizons of few centimeters to about 3.5 meters thick. It is generally reddish-brown to chocolate-brown, depending on the amount of iron oxide present in the rock. Rhythmically bedded red and dark colored chert-jasper, in places alternating with thin beds of manganese oxides, is observed a few meters from the main manganese ore bodies. These bodies lie in conformity with the trend of the enclosing rocks. As a rule, the manganese orebodies are found at or near the massive chert-jasper beds. Megascopic examinations of ore samples taken from different portions of the manganese deposits show that the manganese minerals are composed

mostly of braunite and some pyrolusite. Pyrolusite is generally found as coatings on the braunite and/or as concentrations along fractures in the rocks and, therefore, appears secondary after braunite. The Milagros property is a volcanogenic-sedimentary manganese type deposit related to submarine volcanism and crustal displacement. The manganese and chert were probably chemically precipitated from low temperature hydrothermal solutions, and accumulated on the sea floor along with other sediments. In many deposits, the manganese was further concentrated by diagenesis and secondary processes (Stanaway et al., 1978; Roser, 1983).

Worth noting also is the occurrence of copper oxides zone(25m x 25m x 5m) exposed along a narrow hill located north of the study area. The host rock is propylitic altered spilitic basalt with pervasive malachite and azurite stains. The occurrence of Volcanogenic Massive Sulfide “Cyprus Type” copper deposit is not precluded at depth given its occurrence and geologic setting. The age of mineralization is probably Middle to Late Cretaceous.

In the absence of primary exploration data on drilling, test pitting and trenching, the manganese orebody exposed by Alfonso Mining Corp. located just few meters east of the central boundary was used as a basis in resource computation by projecting or assuming the structure to persist SW towards the study area along a strike length of 500 meters, average width of 3.5 meters and thickness of 15 meters. Initial geologic resource estimate is around 97,100 Mt (>35%Mn) and 1.1 Million Mt for (10-35% Mn) alone for the central orebody. Other significant manganese ore zones scattered in the area were not included in the resource estimate in the absence of exploratory workings to support the resource calculation. The inferred resource though has yet to be established through target drilling and trenching.

A total of 150 MT ore/rock samples were collected for assay analysis. The assay and chemical analysis were performed by the SGS laboratory. A scale of 1:50,000 topographic map was used as base map for plotting of observation points.
 
 
I2.0 DESCRIPTION AND LOCATION OF MINING CLAIM AREAS
 

The mining claim areas of UNI-DRAGON MINING AND DEVELOPMENT CORP. undertake EXPA 00138-V with an area of 7,825 hectares more or less, are located within open and wide cattle ranges covering Brgy, Pamangpangon and Brgy. Casamongan, Municipality of Milagros, Province of Masbate. The area used to be the site of large cattle ranches mostly owned by known personalities in Masbate. The mining claim areas are centered at geographic coordinates 12 degree 06’ 54.7” north latitude and 123 degree 18’ 36.6” east longitude, and lie approximately 34km. southwest of the highly prospective Milagros manganese province. The mining claim areas are within a wide and gently rolling hill and almost flat valley plain and prairies (photo 1 & 2).

3.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES,INFRASTRUCTURE AND PHYSIOGRAPHY
 

The study area is about 34 aerial kilometers southwest of Milagros, the nearest progressive town of Masbate. While the island of Masbate on the other hand, is approximately 500 kilometers south of Manila. It is accessible from Manila via 1hour travel by plane or 6-8hrs by land trip. From Masbate City, the project site can be reached through a 22km ride from Masbate City to Milagros and 32 km from Milagros to the project area. An asphalt and all-weather road connects Masbate City to the project area (Figure 1). Travel by air is facilitated by the Moises R.Espinosa airport at the provincial capital. It is utilized by a 50-seater Asian Spirit which flies to Manila daily. The province has one major port set up at the capital town and 14 municipal ports. Travel through the provincial seaport is facilitated by the WG&A’s Our Lady of Sacred Heart, for travel to and from Manila, the Sulpicio Lines’ MV Cebu Princess, Viva Lines’ MV Peñafrancia for those going to Lucena, and Trans-Asia’s MV Indonesia for passengers bound for Cebu City. The municipal ports are served by motorized boats which can accommodate 50 passengers. These same ports connect the municipalities to Bogo town in Cebu, Estancia town in Capiz, Pasacao town in Camarines Sur, and to Pilar and Bulan towns in Sorsogon. Getting to Masbate by land is not a problem. Mini-buses like Ran-D, Gelli, Triple L, and Friendship Liner serve the transportation needs of the people of the province as well as visitors and tourists. They are stationed at the maintown’s land terminal, which is beside the municipal public market.

The study area falls under the Type 4 of the modified Coronas Classification of the Philippine Climate (Figure 2). It has no pronounced wet or dry seasons; dry during the months of February to May and wet from June to January with August being the highest rainfall record. Temperature ranges from a minimum average of 22°C during the cooler months of November to March to a maximum average of about 33°C occurring between April and July.

The area is drained by several tributaries of still unknown local names. The drainage pattern in the area is appears to be of dendritic-rectangular form, suggestive of structurally controlled drainage system major faults and folds. The area is mostly vegetated with cogon grasses and secondary forest growths, while the lower elevations are cultivated to agricultural crops (coconut, rice paddies, and vegetables).

Farming remains the main source of livelihood. Cattle raising is growing its popularity among the people of the province while fishing is considered one of the major industries. Copra is the leading product followed by corn and rootcrops. Considered as one of the richest in terms of mineral resources, Masbate has considerable deposits of copper, silver, iron, manganese, and chromite. Identified growth centers in the province are Masbate, Aroroy, Cataingan, Dimasalang, and Milagros. While coconut production and fisheries remain the basic industries, Masbate is expanding to include wholesale and retail trade, bigger ventures in manufacturing, community and personal services, transportation, communication and storage, financing, insurance, real estate and business services, agriculture, fishery, forestry, and electricity and gas.

4.0 EXPLORATION HISTORY
 

The Milagros property is well known for the presence of numerous manganese showings that had been explored and/or worked on during the past. The area is situated in a region that may be technically considered as viable targets for manganese and copper mineralization given its geologic character and history. The Milagros Manganese property has been covered by reconnaissance geological survey of the Bureau of Mines in the 1960’s. Follow-up survey was undertaken in the 1970’s to 1980’s but no reported detailed exploration works were conducted in the area. However sometime in 2005, the Alfonso Mining Corp. located approximately > 100m east of the claim boundary, excavated a manganese ore zone (25m x 4m x 15m) through mechanized mining and several other open cuts clustered on the same trend (N50°E) adjacent to the Milagros property. As projected, the adjacent exploratory workings will transect the study area in southwest extension.

5.1 Tectonic Setting
 

The Philippine Archipelago forms part of the Western Circum-Pacific Rim, an island arc system (Figure 3) lying at the junction of three crustal plates. It is a complex agglomeration of discrete terranes; ophiolitic slabs of oceanic origin and continental margin fragments, brought together by strike-slip fault displacement and by convergence and interaction of oceanic plates since late Mesozoic time (150 Ma). Accretion and coalescence of the various components has evolved something approaching a continental landmass. The archipelago forms a mobile belt between 300 km to 600 km wide; a broad zone of active deformation, seismicity and volcanism, framed by two opposing and convergent systems. To the east the Philippine Sea plate is being thrust westwards along the westerly dipping Philippine/East Luzon Trench subduction zone while to the west the South China Sea plate is being under-thrust eastwards along the easterly dipping Manila, Sulu-Negros and Cotabato trenches. The Philippines Fault, a major strike-slip system, runs 1,200 km north-south through the central portion of the mobile belt from Luzon in the north to Mindanao in the south, passing to the east of Masbate. Sinistral displacement along the fault may exceed 200 km. It has never been clearly established if the ore mineralization in Masbate has been related or influenced by the movements on the Philippine Fault. All the major deposits are found along mobile orogenic belts, commonly in clusters and are predominantly the products of epithermal mineralization associated with episodic magmatism and intrusive rock emplacement, either into breccia or shear structures or in the form of porphyry deposits. The mineralizing events have been dated from early Cretaceous (110 Ma) to Miocene (20 Ma).

 
5.2 Regional Geology
 

The oldest rock units recognized in Masbate Island are the pre-Cretaceous Mt. Manarao Basalt and the Boracay formation, which represent deep marine volcanic flows and the corresponding pelagic capping of an ophiolitic basement, respectively. The Late Eocene-Oligocene Mandaon formation unconformably overlies this ophiolitic sequence and is intruded by the Middle Oligocene Aroroy Diorite. These rock units are, in turn, overlain by volcanic and clastic sequences of the Late Oligocene to Early Middle Miocene Sambulawan formation. Overlying the Sambulawan formation is the Late Miocene to Early Pliocene Masbate group, consisting of various volcano-sedimentary facies (Lamon Andesite, Buyang Limestone, Lanang conglomerates, Cawayan clastics and Mt. Nabongsoran Andesite porphyry). The Late Pliocene to Early Pleistocene Bugui Pt. Llimestone conformably overlies the Masbate group. The eastern part of the Island consists of folded and Philippine fault-bounded Late Oligocene to Early Miocene Uson Limestone and Buena Vista shale. These units are correlated with the Sambulawan formation, which outcrops in the southwest and central portions of the Island. The volcanic belt occurs along the western flank of an earlier diorite intrusive of early to mid Tertiary age (20 Ma to 10 Ma) which is in turn part of a larger north-east trending high-potassium calc-alkaline island arc sequence. The following are the rock formations in Masbate Island arranged from oldest to youngest.

 
5.2.1 Manarao Basalt Formation
 

This formation consists of massive aphyric basalt. Along Brgy. Pamangpangon, the formation is composed of massive spilitic basalt, chlorite altered with zeolites occurring as radiating clusters in interstices and veinlets of metamorphosed rocks. This rock unit hosts the copper showings north of the study area and belongs to Mt. Manarao Basalt Formation of Cretaceous age.

 
5.2.2 Boracay Formation
 

This formation consists of basaltic flow breccia, conglomerate, greywacke, sandstone, tuff and gabbro. The cherty sediments are composed of red shales and mudstones, usually containing minor quartz veinlets. Manganese mineralization occurs usually within thick chert beds in metamorphosed sequences. Outcrops along drainage channels are limited and are far apart due to extensive erosion and substantial alluvial cover. The formation is in a thrust fault contact (trending NE-SW; dipping SE) with the Mandaon formation and in stratigraphic contact with the Mt. Manapao Basalt. The formation is presumed to be Pre-Cretaceous.

 
5.2.3 Mandaon Formation
 

This formation comprises of a thick or tectonically thickened sequence of dark well-indurated sandstone and conglomerate, fragmental flows, volcanics and occasional parallel-bedded red calcarenites displaying graded bedding, with some syngenetic manganese beds. The volcanic units range from andesite to basalt with minor dacite. This formation is unconformably overlain by the Sambulawan formation.

 
5.2.4 Aroroy Diorite
 

Large dioritic intrusive bodies lie along a roughly NW-SE direction (Figure 3), which is almost parallel to the general trend of the Philippine Fault Zone. The mineral compositions of the intrusives vary in different localities. In most cases, they occur as granodiorite, quartz diorite, tonalite, diorite and hornblende diorite porphyry.

 
5.2.5 Sambulawan Formation
 

This formation consists of a sequence of shallow marine clastics, calc-alkali volcanics, fragmental flows and minor carbonates, which unconformably overlie the Oligocene erosion surface of the Mandaon formation. The Sambulawan formation, exhibits a NE-SW trending synclinal structure with moderate dips. In the eastern portions, this formation has moderate to steep dips to the NE.

 
5.2.6 Mobo Diorite
 

The Mobo pluton is a roughly circular body intruding the Sambulawan formation. This Stock varies from hornblende diorite to biotite diorite. Fresh samples show that the diorite has a granular texture, is medium to coarse grained and with sericitized plagioclase and chloritized hornblende.

 
5.2.7 Nabongsoran Andesite Porphyry
 

Small stocks, plugs, flows and pyroclastics composed of andesite porphyry are all that remains of an episode of highly eruptive and siliceous Pliocene volcanic activity. The rocks outcrop as scattered and isolated distinctively cylindrical monuments.

 
5.2.8 Bugui Limestone
 

The Bugui Limestone is part of the shallow marine to terrestrial volcanism and sedimentation, with possible local erosion, that occurred during the Late Miocene to Early Pliocene with the deposition of the Masbate group in various sedimentary facies. Outcrops of this unit are restricted to coastal areas.

 
6.0 GEOLOGY OF THE MINING CLAIM AREAS
 

The study area and vicinity are underlain by the following lithologies in order of decreasing geologic age (Figure 4):

6.1 Lithology
 
 
6.1.1 Massive Aphyric Basalt
 

This formation consists of metavolcanics. Along Brgy. Pamangpangon, the formation is composed of massive spilitic basalt, chlorite altered with zeolites occurring as radiating clusters in interstices and veinlets of metamorphosed rocks. This rock unit hosts the copper showings north of the study area and belongs to Mt. Manarao Basalt Formation of Cretaceous age.

 
6.1.2 Chert-Manganese Interbeds
 

This is formation consists of bedded sequence of bedded red chert-jasper with synthetic manganese beds and well indurated dark green wackes and agglomerate. The red chert usually forms the wall rock of manganese deposits in the area. It occurs as alternating layers and lenses with the manganese outcrops. These rock units belong to Boracay Formation of Early Cretaceous age.

 
6.1.3 Indurated Sediments
 

Located north of the study area are the Indurated Sediments. This formation is consists of thick sequence of dark well indurated volcanic sandstone, conglomerate and basalt flow with occasional red calcarenite and syngenetic manganese bed. These rock units belong to Mandaon Formation of Middle to Late Cretaceous age.

 
6.1.4 Recent Alluvium
 

Alluvial deposit consists of unconsolidated clay, silt, sand and gravel deposited in the easternmost part of the area.

 
6.2 Geological Structures
 

The major structural element recognized in the area is a NE trending thrust fault considered to be a major tectonic structure in the area and probably resulted by an upthrust crustal displacement of the north west trending and active Philippine Fault. (Figure 4).The fault appears to have been influenced by the crustal movement along the NW trending Philippine Fault resulting in overthrusting of Mt. Manarao Basalt Formation against the younger Boracay Formation in the western edge of the area.

Lenses and beds of manganese are conformable with the flow structures of the chert-jasper and metavolcanics interbeds. In the study area, the general trend of the beds, flow structures and lineations/shear zones is about N 40-50°E and dips steeply to the southeast (Figure 4). Secondary and inferred fault and fracture systems are oriented across the flow lines and beds, suggestive that these are recent structures possibly brought about by strike-slip movement of the active NW trending Philippine Fault.

 
7.0 DEPOSIT TYPE AND MINERALIZATION
 

The Milagros Manganese Prospects are primary manganese deposits of volcanogenic-sedimentary origin related to submarine volcanism. The lithostratigraphic control is the association of manganese with spilitic basalt and intercalated chert-jasper interbeds. The manganese ore zones are disposed along NE trending lineaments/shear zones parallel to the direction of the major thrust fault located north of the study area (Fig. 4). The manganese deposits are tabular, lenticular masses with pocket bodies occurring along definite or in several horizons of few centimeters to about 3.5 meters thick. It is generally reddish-brown to chocolate-brown, depending on the amount of iron oxide present in the rock. Megascopic examinations of ore samples taken from different portions of the manganese deposits show that the manganese minerals are composed mostly of braunite and some pyrolusite. Pyrolusite is generally found as coatings on the braunite and/or as concentrations along fractures in the rocks and, therefore, appears secondary after braunite.
Given the limited data available on the Milagros project, neither deposit model can be either confirmed or eliminated from consideration. Additional exploration will be required to determine the best deposit model for the Milagros project.

 
8.0 DESCRIPTION OF MANGANESE AND COPPER DEPOSIT
 
 
8.1 Main Orebody (Alfonso Open-pit)
 

The Alfonso open-pit is centered at geographic coordinates 12° 06’ 34.9” north latitude and 123° 19’36.1” east longitudes at elevation 31m. The orebody is approximately 100m east of the Uni-Dragon-Alfonso Mining Corp boundary (Figure 4, Photos 3 & 4)). Recent ocular inspection at the main site suggests that an estimated 21,000m³ of earth and ores (35m length x 40m width x 15m thick) had been excavated through mechanized operation since year 2005. The high grade manganese ore consists of tabular to lenticular pocket bodies ranging from a few centimeters to about 3.5 meters. The exposed manganese ore zone of about 40m wide is an interlayered manganese-chert interbeds and being mined as a whole orebody. Hand sorting is usually done to separate the high grade and manganiferosus ores from the ferruginous manganese ores (<35% Mn). The primary manganese deposit is associated with dark brown chert-jasper interbeds in a thick sequence of metavolcanics and metasediments. The chert-jasper is either bedded or thinly laminated. The silica (chert) and manganese were probably both deposited from the same source in marine environment characterized by volcanism. Occasional intertonguing layers and pods of primary dark steel gray primary manganese in chert-jasper or small pockets of sooty, sometimes sandy to massive manganese oxides also manifest.

The manganese beds and lenses are conformable with the beds of the chert-jasper which strike generally at N40-50°E and dip steeply to the southeast (Photos 3 & 4). The general trend of the manganese ore zone is relative to the direction of the major thrust fault located north of the study area. As projected SW towards the Uni-Dragon Claim boundary, the trend of the manganese main orebody is persistent at a strike length of ±100 meters and width of 3.5 meters. This mapped structure is superimposed on the Lineament Map (Land sat Images) of Japan International Cooperation Agency (JICA, 1990), and coincides with the major lineament and appears to persists on a strike length of 1 kilometer north and south of the study area (Figure 4). An in-depth study must be conducted by tracing this structure through exploratory workings (diamond drilling, test pitting, trenching) and detailed mapping. These parameters can be used as a guide in evaluating and locating the extension and persistency of the deposit. Though the presence of chert-jasper does not necessarily indicate manganese deposition, the results of this study as correlated with Main Orebody being mined by Alfonso Mining warrant detailed mapping for delineation of chert-jasper interbeds as pathfinder for possible manganese mineralization.

8.2 Central Manganese Ore Zone
 

The central manganese ore zones in the central part of the area clustered in NE trend parallel to the main orebody. Two zones were identified but the exact magnitude has yet to be established in the absence of exploratory workings in the area. Surface manifestations include scattered pebble to cobble size manganese fragments in the surface and further tested by digging 0.30m deep test pits exposing an oxidized manganese ore outcrops (Photos 5, 6, 7 and 8).

Photo 5.In-situ ferruginous manganese fragments in the central area, indicative of manganese ore at depth. Located at 12°05”55.5N and 123°20”26E.

Photo 6.Dug shallow trench beneath the ferruginous manganese fragments seen at the surface at 12°05”56N and 123°20”29E.

Photo 7.Recovered oxidized manganese ores taken from shallow trench.

Photo 8.Trenching of high grade manganese outcrop

Photo 9.High grade manganese ore at 12°04”44N and 123°20”45E. The ore sample was previously assayed at >60% Mn

8.3 Copper Prospect
 

Worth noting also is the occurrence of copper oxides zone(25m x 25m x5) exposed along a narrow hill located at 12°06”33N and 123°21”43E (Photo 9 and 10). The host rock is spilitic basalt with pervasive malachite and azurite stains. The occurrence of Volcanogenic Massive Sulfide “Cyprus Type” copper deposit is not precluded at depth given its occurrence and geologic setting. The age of mineralization is probably Middle to Late Cretaceous.

9.0 GEOLOGIC RESOURCE ESTIMATE
 

In the absence primary exploration data in drilling, test pitting and trenching, the manganese outcrop exposures and large open excavation in the claim boundary was used as a basis in resource computation by projecting or assuming the structure to persist towards the study are along a strike length of 500ms, average width of 3.5m and thickness of 15m. Geologic resource in the area falls under Inferred Classification.

Inferred Geologic Resource – the part of mineral resource for which tonnage, grade and mineral content can be estimated with low level of confidence. It is inferred from geological evidence and assumed but not verified geologically/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, test pits and drill holes which is limited or of uncertain quality and/or reliability.

Table 1. The geologic resource of manganese ores >50%Mn are as follows:

Length (m)	Width (m)	Thickness (m)	Volume M3	Specific Gravity	Geologic Resource (metric ton)
500	3.5	15	26,250	3.7	97,100

Table 2. Ferruginous manganese ores, 10-35%Mn are inferred as follows:

Length (m)	Width (m)	Thickness (m)	Volume M3	Specific Gravity	Geologic Resource (metric ton)
500	40	15	300,000	3.7	1,100,000