The Carheil property lies north of the Abitibi region in Brouillan Township, about 5 kilometres southwest of the old Selbaie mine (Rio Algom Limited, historical production of 53 million tonnes grading an average of 0.96% copper, 1.90% zinc, 40.7 g/t silver and 0.58 g/t gold, from activity report DV 2005-01,M.R.N.F.), in similar geological units, on the southern flank of an anticline that lies between the property and the Selbaie mine (see regional geology figure). The property, which consists of 32 contiguous claims in 2008 and is wholly owned by NQ Exploration Inc. without any third-party royalties, was enlarged in the fall of 2009 when NQ Exploration Inc. acquired an additional 89 claims by staking and map-designation. The Company now owns 121 contiguous claims covering a total surface area of 35.1 square kilometres, representing 13.5 kilometres, west-northwest striking section along a favourable unit hosting copper-zinc mineralization. In April 2010, NQ Exploration Inc. also signed an option on Ariane Resources Inc.’s Brouillan Ouest property, which lies adjacent to the Carheil property (see regional map). It thus added another 15 claims covering 834 hectares at the northwestern end of the property, where it has an option to earn a 50% interest in exchange for exploration work (see press release dated April 13, 2010).
Extensive exploration was carried out on the property over a period of more than 20 years, from 1976 to 1998. In all, 23 holes were drilled to test for massive sulphides and gold, mainly by BHP Billiton (formerly Rio Algom Ltd.) from 1993 to 1998.  Three mineralized showings were identified. The best intersections were as follows:

• Central section: 0.43% Cu over 2.44 m in Hole BR76-2;
• Northeast corner: 1.16% Zn over 14.1 m in Hole B1098 and 3.67% Zn over 2.4 m in Hole B906; and
• Southern sector: 0.17 g/t Au over 3 m in an exhalite in Hole B1472.

The Nordest showing proved to be the most promising. Earlier drilling programs by Rio Algom Ltd. had identified two mineralized units: a rhyolite unit followed by a dacite unit, the first primarily mineralized in zinc and the second in copper (see surface geology figure). The best results for each zone from the eight holes drilled at the time were:

• Rhyolite zone with sphalerite: Hole B-1098, from 208.0 to 222.1 m, 1.16% Zn over 14.1 m;
• Dacite unit with chalcopyrite: Hole B-905, from 144.2 to 152.5 m, 0.71% Cu over 8.3 m.

Eleven years later, NQ Exploration Inc. carried out its first drilling program on the Carheil property, which demonstrated substantial improvement in the copper-zinc potential at depth. The February 2009 drilling program focused on the Nordest showing and indicated that the rhyolite units, massive to semi-massive sulphide beds and zones of copper-zinc stringers become much thicker at depth. A strong increase in the intensity of the geochemical alteration was also seen in the deepest hole, Hole CA2009-04. All these observations confirmed a volcanogenic massive sulphide environment that becomes increasingly proximal with depth, namely at 250 metres vertical depth. The property lies in a geological setting similar to that of the Selbaie mine.
The diamond drilling program consisted of a total of 1,251 metres of drilling in four holes and a TDEM survey in three of the four holes. The program targeted the mineralized zone at a vertical depth of 200-250 metres. The results clearly show that the metal content and thickness of the mineralized unit increase at depth. The best results of the three holes drilled on the Nordest showing were:

The mineralization occurs in the form of millimetric- to centimetric-sized veinlets of sphalerite, chalcopyrite and pyrite forming a stockwerk-like network in the altered rhyolite and dacite units.
Generally, all the data from earlier work and the NQ Exploration Inc.’s February 2009 program shows that between surface and a vertical depth of 250 metres (see maps and photos):

• The thickness of the rhyolite unit increases from 20 m to over 100 m (see rhyolite longitudinal figure);
• The thickness of the massive to semi-massive sulphide zone overlying the veinlet zones increases from 1-3 m to over 20 m (see sulphide longitudinal figure);
• The thickness of the zones of Cu-Zn-rich stringers zone increases from 1-10 m to over 100 m (see mineralization longitudinal);
• The veinlets increase in size from millimetric to centimetric;
• The intensity of the geochemical alteration zones increases considerably, with an Ishikawa index of over 95, an MgO/CaO ratio of up to 51.9 and a K2O/Na2O ratio of over 70;
• Black chlorite, a high-temperature alteration mineral, appears at depth;
• The geochemical gold values increase.

The encouraging results of the February 2009 program significantly increased the potential for a copper-zinc-gold-silver discovery at depth, either in a generally volcanogenic massive sulphide setting or, more specifically, in a Selbaie geological setting.
The Company therefore decided to pursue exploration on the property in November 2009, with a second, more aggressive drilling program to test the deeper levels between 300 and 600 metres. A total of six holes totalling 3,160.5 metres were drilled on the main target, the Nordest showing. All the holes intersected copper and zinc with increasingly higher gold and silver grades. Many of these intersections were among the best in the region (also see press release dated March 8, 2010):

* True depth in brackets

The results obtained confirmed an substantial increase in the intensity and thickness of the black chlorite alteration with depth, as well as a marked thickening of the felsic volcanic units and the appearance of a polymictic agglomerage unit, all recognized criteria of close proximity of a volcanogenic massive sulphide geological setting (see longitudinal).
Holes CA2009-05 (+CA2009-05W) and CA2010-09 were drilled on Section 650E, behind Hole CA2009-04, the deepest hole of the previous program, while holes CA2009-06 to 08 were drilled 100 to 250 metres farther west (see Section 650E and longitudinals).
The Nordest showing consists of the same lithological units, alterations and mineralization styles as the Selbaie mine. Among other things, barren massive sulphide zones have been identified at the top of the rhyolite unit, along with lenses of so-called “pisolitic rhyolite” (likely chert in gel form), typical Selbaie-environment marker horizons. In addition, the deepest 2010 holes clearly show an increasingly proximal volcanogenic massive sulphide geological environment. For instance, on Section 650E, the black chlorite alteration, while absent near surface, intensifies significantly from 200 to 400 metres deep over a thickness of 30 to 35 metres, and peaks at around 600 metres depth over a thickness of 60 metres. The chloritization is generally accompanied by very intense silicification, with occasional evidence of porcelanite. At about -400 metres, a polymictic felsic agglomerate unit also appears, showing singular fragments of margin-chilled rhyolite, fragments of welded rhyolite tuffs and fragments of devitrified felsic glass, all evidence of hot, and therefore near-source, deposition. In this area and at depth, fragments of massive sulphides also appear, forming up to 40% of the pyroclastic fragments that surround the agglomerate.
The high copper and zinc grades obtained from this program, as well as the associated high precious metal grades (524.1 g/t silver over 10.5 metres and 4.78 g/t gold over 1.30 metres), are among the most significant ever obtained in the region, outside of Selbaie. This in itself is another indication of proximality and excellent potential.
Management of NQ Exploration Inc. believes more firmly than ever in the property’s discovery potential, now holds over 13.5 kilometres of prospective land around the Nordest showing, and intends to continue exploring the area in an aggressive fashion.
Additional information on the potential of the Nordest showing can be found on the maps and sections under “Maps”.