Bay Silver Property

Summary

The Bay Silver property is located on Bear River ridge, a few kilometers north of Stewart, BC. It controls the old United Empire mine from which limited production of high-grade silver was seen in the 1930’s. Ore from the mine was shipped to the valley floor below by way of a tramline, portions of which still remain on the property.

The property contains numerous silver-rich showings some of them developed by hundreds of feet of tunnels. In 1983 and 1984, high-grade ore was trenched from silver- lead- zinc veins, first explored in 1919. The No. 4 zone consists of a 1.2-metre-wide vein which strikes northeast and dips 20 degrees southeast. The vein contains 0.6 metres of massive galena, sphalerite and tetrahedrite in the hangingwall and 0.6 metres of quartz with disseminated sulphides in the footwall.

In previous assessment reports, a 0.61-metre chip sample across the vein assayed two grams per tonne gold, 8679.7 grams per tonne silver, 20.3 per cent lead and 20.2 per cent zinc. The No. 3 zone is reported as being located about 100 metres south of the No. 4 zone. This shear zone contains long lenses of quartz mineralized with pyrite, pyrrhotite, galena and sphalerite. These lenses are up to 1.8 metres wide associated with a stockwork of sulphide stringers and are hosted in schist which has a strike of 150 degrees.

The lower showings, 300 metres east of the No. 4 zone, consist of two quartz-sulphide veins. The southernmost vein lies along the contact between a large granodiorite dike on the east and hornfelsed argillite to the west. The vein contains lenses of pyrrhotite, sphalerite, galena and tetrahedrite in a gangue of quartz. In a previous assessment report a 0.91-metre chip sample across the vein assayed 42.30 grams per tonne gold and 1,273 grams per tonne silver. A second vein 120 metres to the north assayed 15.96 grams per tonne gold and 2,268 grams per tonne silver over a narrow width.

All of this early work was carried out prior to NI43-101 and as such cannot be relied upon. It is presented here solely to provide historical context.

The property is owned jointly by Teuton and SilverGrail Resources Ltd. In 2011 the two companies optioned the Bayview Silver to Decade Resources. Under the terms of the deal , Decade will pay $120,000 over four years to earn a 100% interest. Teuton and Silver Grail retain a net smelter royalty of 2%, of which an advance royalty of $50,000 per year, indexed to inflation, is also payable beginning in 2016. Terms of the option have been extended in consideration of difficult capital markets.