Highland Valley

RATERIA AND WEST VALLEY PROPERTY

The Rateria and West Valley properties adjoin to the east and west, respectively, the southern portion of the Highland Valley Copper mine property, and adjoins to the north of the former Craigmont copper mine property, located north of Merritt, British Columbia, Canada. Highland Valley Copper (HVC) is Canada's largest copper producer, currently mining an average 140,000 tonnes per day in total from three different pits (Valley, Lornex and Highmont). During the recent two years of low copper prices, the mine is producing more from its higher grade areas and averages approximately 0.29 to 0.37% copper. (data obtained from publically available information found on SEDAR). Under NI43-101 (2001), the reader is cautioned that results or information from an adjacent property does not infer or indicate similar results or information will or does occur on the subject property. Historical information from the subject or adjacent property cannot not be relied upon as the Company’s QP, a term which was created and defined under NI-43-101 has not prepared nor verified the historical information.

RATERIA AND WEST VALLEY PROPERTY FACTS

                 
Property 16,173 hectares or 161.7 square kilometres of mineral tenure
Ownership 100% Happy Creek Minerals Ltd. since 2006
Key minerals present Copper, molybdenum, rhenium, gold and silver
Location 35 km north of Merritt, south central British Columbia, Canada
Access Via paved and gravel roads from Merritt
Closest mine Former Craigmont copper mine 5 km to the south, and Highmont mine- part of the Highland Valley operation, 6.5 km to the north
Surveys completed Prospecting, geology, geochemical, airborne+ground geophysical, LiDAR, drilling
Drilling - Totals 10,421.57m in 82 holes in 4 separate zones
Zone 1 67 holes 18,073 metres. Results: 95.0m of 0.67% Cu, 250.0m of 0.25% Cu, 100.0m of 0.35% Cu
Zone 2 24 holes 6,263 metres. Results: 126.0m of 0.42% Cu, 92.0m of 0.30% Cu, 0.15 g/t Au
South Yubet  16 holes 3,935 metres. Results: 7.5m of 1.35% Cu, 12.4 g/t Ag, 7.5m of 1.69% Cu, 30.7 g/t Ag
Rateria West 2 holes 495.5 metres: Bethsaida phase with sericite alteration- trace malachite-bornite
Moss 4 1 hole 154 metres: Skeena phase with strong faults, chlorite-sericite-clay alteration. Trace malachite-bornite
West Valley 3 holes 741 metres at new NTP showing. 250-350 ppm Cu avg top to bottom of holes. 2.5m of 1.2 g/t Au
Rateria East 1 hole 203.3 metres. Native copper in weak pervasive sericite for entire hole.
Project Stage Exploration and resource drilling, mineral processing, economic analyses, engineering of Zone 1 and 2
Services  Hydropower, 30 min drive to Lower Nicola village near Merritt. Logging roads and clear-cuts provide access within property.

Rateria Property

Happy Creek's Rateria property covers important geology having similarities to the deposits currently in production to the north. The property is largely covered by 3 to 100 metres of glacial till that affected historical exploration. The Company has carried out modern, three dimensional induced polarization (3D IP) and magnetic geophysical surveys, geochemical and geological surveys and drilling that has located two new zones, Zone 1 and 2. These deposits have sufficient drilling to outline continuous mineralization and are thought to be new finds in the Highland Valley district that can be advanced and expanded further with additional drilling. With experience gained in success of finding Zone 1 and 2, interpretation of all data suggests several other targets have potential to host copper deposits.

The low concentrations of pyrite and deleterious elements and dominantly bornite-chalcocite copper minerals with accessory molybdenum, gold, silver and rhenium are thought to be additional positive qualities. Recent metallurgical testing on Zone 1 material suggests relatively high recovery with simple flotation and a product containing 39.6% copper and 398.6 g/t silver was obtained from Zone 1. Zone 2 metallurgy is similar to Zone 1 such that material from both could potentially be blended together. In addition, Zone 2 contains more molybdenum, rhenium and gold which may be important by-products and geologically reflects a different, more copper-gold type deposit.

Zone 1

Zone 1 was first discovered by the Company in 2006. The Company has outlined continuous copper and silver values extending to over 450 metres in depth, 1.2 kilometres in length and 50 to 200 metres in width. The geology and copper values found at end of many drill holes suggest the zone is open in extent and possibly becoming larger at depth. The Company also intersected the southern extension of the Yubet prospect for over 600 metres on the Rateria property returning positive values that are thought to be a part of the Zone 1 system.

Zone 2

Zone 2 was discovered in 2008, about two kilometres northeast of Zone 1. Widely spaced drilling in Zone 2 has intersected encouraging copper, molybdenum, silver, gold and locally significant rhenium values. Positive to potentially economic grade copper values occur in drill core in an area approximately 1.5 kilometres by 1.0 kilometre in dimension that remains undefined and open in extent. Zone 2 is part of a geological corridor that is over five kilometres in length through the Rateria property with several other prospects occurring on this trend. This Corridor is believed to be the geological contact between older and the younger phases of the Guichon Batholith, and has associated fracturing, hydrothermal alteration and copper mineralization associated with it.
With experience gained in the discovery of Zone 1 and 2, the Company has performed on-going surface exploration and identified several other priority target areas on the property. Future drilling is planned to continue advancing Zone 1 and 2 with a view to generating a resource and preliminary engineering and economic studies. Other targets are drill-ready and thought to hold potential for copper mineralization that could add to Zone 1 and 2.

West Valley Property

Historically fragmented properties and owners, cursory style work, older technology, and large areas covered by glacial till have limited previous exploration effectiveness. The West Valley property contains a number of historical and, thanks to recent logging activities, recently discovered copper prospects. These are in proximity to dykes of the younger phases of the Guichon Batholith. Positive values of copper in drill core, rock and stream sediment samples, geology, structure and broad alteration zones suggest that the West Valley property hosts excellent potential for porphyry copper deposits.

Geology

The Rateria and West Valley properties are underlain by multiple phases of the Guichon Batholith that is Upper Triassic-Lower Jurassic in age. The younger phases of the Guichon Batholith host five large deposits totaling over 1.8 billion tonnes of resources. The oldest rocks are Border phase that are comprised of hornblende rich diorite, gabbro or pyroxenite and occur peripherally to younger phases of the Batholith. The Rateria property covers portions of the younger phases of the Batholith that includes from youngest to oldest, Bethsaida, Skeena, Bethlehem and Chataway-Guichon phases, respectively. These rocks vary from quartz monzonite to quartz diorite and granodiorite in composition. Syn to post-Bethsaida age dykes consist of fine to medium grained grey to pale green colored quartz feldspar phyric or porphyry and orange-tan colored fine grained k-feldspar rich aplite. Locally aplite appears with a micro feldspar porphyritic texture and can contain strong copper mineralization. Proximity with geological contacts of the younger intrusive phases and dykes are spatially associated with hydrothermal alteration and copper mineralization. Regional to district scale fault zones cut the batholith in north, northwest and northeast to east-west orientations that also, in part, control emplacement of the various intrusive rocks, associated hydrothermal alteration and copper sulphides. Pre-mineral, syn-mineral and post-mineral faults occur. Displacement of mineralized zones by faults may be significant in the district and at the south end of Zone 1 an east-west oriented fault is thought to have displaced the zone. Faults may be strike-slip, normal or reverse in sense. Rock alteration varies from potassic (biotite, k-feldspar, quartz), propylitic (chlorite, epidote, carbonate), phyllic (quartz, sericite/2M1 muscovite) and argillic (kaolinite, montmorillonite, dickite and other clay). Phyllic and argillic alteration and laumontite, heulandite or other zeolite minerals appear in part to overprint potassic and propylitic alteration. Magnetite can be variably altered and martite, hematite, jarosite, goethite and specularite occur.

The copper sulphide minerals identified to date are comprised bornite (63.3% copper), chalcocite (79.8% copper) and minor chalcopyrite (34.6% copper). Pyrite is generally rare in all alteration assemblages, and less than 1% in proximity to Zone 1 and 2. Pyrite appears in greater quantity where chalcopyrite greatly exceeds bornite and also in the outer Border phase rocks on the Rateria and West Valley properties.

Zone 1 is located near the contact between Bethsaida and Skeena phase and dykes of aplite to feldspar porphyry composition occur. Bethlehem phase rocks may occur but are not confirmed. Fractures are filled by quartz and sericite/ phengitic muscovite, forming veins, veinlets, stringers, and locally stockwork to breccia textures occur. Outward, more chlorite and clay minerals appears. Dominantly chalcocite, bornite and associated copper and silver values occur to depths of over 450 metres. Chalcocite replaces bornite that replaces chalcopyrite to great depth in Zone 1. At depth and adjacent the bornite-chalcocite zone, relatively more chalcopyrite occurs and the muscovite is less phengitic.

Zone 2 occurs near the contact of Skeena, Bethlehem and Chataway phases of the Batholith, and dikes of quartz feldspar porphyry and aplite occur. Major structures trend north, northeast and northwest and these faults and conjugate fractures form stockwork and breccia textures locally. Zone 2 is less well defined than Zone 1. Drilling has outlined an area approximately 1.5 kilometres by 1.0 kilometre in dimension that contains positive copper values in drill core, and is undefined and open in extent. Zone 2 is comprised of predominantly bornite, minor chalcocite, chalcopyrite and locally molybdenite, with associated copper, molybdenum, gold, silver and rhenium values. Gold values in Zone 2 can reach 1.0 g/t over 3.0 metres, and are elevated in general within the mineralized zone. Rhenium ratios ranges from 4 to 9 kg Re per tonne of molybdenite. These ratios and presence of elevated gold values are thought to be high, similar to copper-gold porphyry systems.

Zone 2 is part of a "corridor" defined by the contact between the younger and older phases of the batholith that can be seen in geophysical surveys for over five kilometres through the Rateria property. Reconnaissance drilling within the “corridor” have returned long intervals of low grade copper and intermediate argillic to phyllic alteration that couldreflect large scale structures and a good setting for porphyry deposits to occur.

In general, mineralized zones are controlled by proximity to geological contacts between younger phases of the Guichon batholith including dikes, the intensity of fracturing, and a phyllic to argillic overprint of potassic alteration. Lower temperature phengitic muscovite occurs near surface in Zone 1, South Yubet, corridor, and the Sho prospects; which in some research, suggests potential for higher-temperature porphyry style mineralization to occur at depth. The copper oxides malachite, azurite and native copper occur in minor amounts and generally very near the surface. However, very fine grained native copper averaging 0.02 to 0.09% copper occurs with weak sericite alteration to depths of at least 250 to 300 metres in several widely spaced drill holes to the east of Zone 2.

For the West Valley property, the younger phases of the Batholith outcrop along the east side, in proximity to the Lornex fault, and also appear as dikes that cut the Chataway, Guichon and Border phase rocks further west. Based on the presence of the younger felsic phase dykes, associated copper prospects and broad areas of propylitic to locally argillic and phyllic alteration, there is thought to be potential for porphyry systems to occur hosted within older phases of the Batholith. At least four large target areas have been identified for follow-up exploration.

The intra-batholith setting, strong structural controls, predominance of bornite copper sulphides, minimal pyrite within younger phases and more pyrite in the older outer phases of the batholith respectively, suggest in part, that the porphyry copper systems reflect a relatively deep level of formation and have potential to be very large in size.

Geology Photos