The following description of the geology of the Ballmat Mine area has been extracted from "Balmat Mine Resources and reserve Audit, Jamuary 2003" by Johm E. Steers, P. Eng

4.2 GEOLOGY AND MINERALIZATION, BALMAT MINE
4.2.1 Geology (Figure 4-1; W-E section)
             The Balmat mine is located in the southwestern hinge area of the Sylvia Lake recumbent isoclinal syncline. The Upper Marble has been subdivided into 16 stratigraphic units (See Table 4-1) comprised of interlayered dolomitic and silicated marbles with distinct marker horizons and periodic occurrences of anhydrite. Starting at the base of the marble. Units 1, 3, 5, 7, 9, and 12 are medium to coarse-grained gray to white dolomitic marbles beds with very minor quartz, diopside and serpentine. Marble units 4, 6, 8, and 11 are silicious consisting of inter-iayered quartzite, gray diopside and white dolomitic marble beds with minor buffcalcitic marble layers. Unit 14 consists mainly of calcitic and serpentinous dolomitic marbles interlayered with quartzites and diopside rocks. Distinct intercalated "marker horizons" that facilitate stratigraphic correlations and permit detailed structural compilations, are described as follows: Unit 2 is a graphitic gamet-sillimanite-pyritic schist; Unit 7 is a dark gray, fetid, dolomitic marble; Unit 10 is a pea-green, serpentinous calc-silicate rock with anhydrite and biotite schist; and Unit 13 is a talc-tremolite-anthophyllite schist. Lavender to pink, bedded anhydrite is found as massive beds with minor calcsilicates in Units 6 and Units 10 through 13. The Sylvia Lake syncline is a nappe-scale fold that deforms rocks with extreme contrasts in ductility including, sulphides and anhydrite (extremely ductile), dolomitic marbles (moderately ductile), and layered quartz-diopside rich strata (brittle). As a result, macrofractures and tectonic breaks originating in more competent brittle rocks evolved into thrust faults and tectonic slides in the axial regions and limbs of parasitic folds associated with the Sylvia Lake syncline.

            Massive, stratiform lenses and layers of sulphides in units 6, 11 and to a lesser extent unit 14, were locally remobilized as plastic solids into the noses of folds to create elongate stratabound zones parallel to the axes of the fold structures. During later stages of Grenville deformation, where evolving macrofractures or tectonic slides breached the pre-existing sulphide "parent" or source bed massive sulphides a second phase of remobilization was extensive enough to create discrete "daughter" orebodies hosted by other stratigraphic units on the fault surfaces with linear extents upwards of 6000 feet parallel to fold hinges (see Figure 4-3). Lateral mobilization crossing units 6, 7, 8, 9, and 10 is of the order of 2000 feet, in most cases limited by the disappearance of tectonic slide surfaces in unit 10 anhydrite, where they lose their identities because of ductile flow of the anhydrite. Closure of the fault surfaces due to ductile flow precludes further lateral migration thus constraining most flow up and down plunge. The spatial relationships of high-grade parent with nearby remobilized daughter orebodies gives rise to orebody "clusters". Such clusters of orebodies have been mined historically in the Balmat 2, 3, and 4 mines. See Section 4-3 for further discussion of the "parent" -"daughter" concept and its implications.

4.2.2 Mineralization
The Balmat mine encompasses three mining units : Balmat No. 2 Mine (17.8 million tons at 8.7 zinc contained in 6 orebodies), Balmat No. 3 Mine (5.7 million tons at 9.4 zinc contained in 3 orebodies), and Balmat No. 4 Mine (11.5 million tons at 8.6 zinc contained in 5 orebodies). The majority of the fourteen orebodies in the Balmat mine are arranged in three "clusters", containing three to five orebodies each, which were originally mined from three separate shafts, referred to as the Balmat No. 2, 3, and 4 mines. The mineralization is dominantly massive sphalerite (zinc sulphide) with minor galena (lead sulphide) and minor pyrite (iron sulphide). The zinc to lead ratio is approximately 35 to 1. Stratiform "parent" and stratabound but generally crosscutting "daughter" massive sulphide orebodies plunge gently (15 to 25 degrees) to the north-northwest to northeast and generally range in size from 500,000 to 10,000,000 tons. Ore occurs as both tabular and podiform bodies with complex cross-sectional configurations.

 4.3 ORE DEPOSIT MODEL

 The Balmat-Edwards district zinc mineralization occurs within Proterozoic (late Precambrian) metamorphosed limestones of the Grenville Supergroup. The deposits are considered to be Mississippi Valley-type zinc deposits that were deposited in flat lying Proterozoic limestones and subsequently metamorphosed and folded during the Grenville Orogeny. Mississippi Valley type deposits commonly occur in district-sized clusters of orebodies. The orebodies are commonly elongate parallel to ancient shorelines and were deposited in porous host rocks such as fore reef breccias. Such deposits in their original attitude are up to 150 feet thick, 500 to 2,000 feet wide, and 2,500 to in excess of 10,000 feet long. In the case of the Balmat-Edwards mineralization, during the Grenville orogeny, the "Upper Marble" limestones of the district were subjected to high grade metamorphism and deformation that resulted in ductile lithologies, such that the marbles (and their contained sulphide mineralization), behave as "plastic" solids which could flow and thicken into the nose or axial area of fold structures or be remobilized and extruded into and along planar structural features such as fault planes. Within the Balmat mine area Geological Units 6, 11, and 14 host the stratabound zinc mineralization. During the 1990's the Balmat mine geologists recognized (based on similarities in trace element geochemistry between related "parent-daughter" zones and dissimilarities in trace element geochemistry among unrelated "parent-daughter" clusters of orebodies) a "parent-daughter" relationship between certain stratabound zinc orebodies and crosscutting orebodies in their vicinities, which clearly established that the crosscutting ores represented material remobilized from the stratabound zone. The recognition of this "parent-daughter" relationship has far-reaching exploration implications with respect to diamond drilling for new orebodies in the Balmat area. For example, known orebodies of a cross-cutting nature must have a "parent" orebody at the intersection of the cross-cutting planar feature and the "parent" orebody stratigraphic units (mine Geological Units 6, 11, and 14). In the absence of a known "parent" orebody drilling can be focussed along the plunge of the "daughter" orebody where the plunge line intersects Units 6, 11, and 14. Conversely, where stratabound mineralization is crosscut by fault structures, exploration for "daughter" type remobilized mineralization can be focussed along the planar structure up and down plunge from the parent zone.

4.4 RECENT DISCOVERIES
Since 1996, based on the new exploration model, surface and underground drilling has added an additional 11 million tons of mineral resources in Balmat No. 4 Mine in four new ore zones (Mahler, Mud Pond, New Fold and Northeast Fowler) at a cost of finding of approximately $0.17 per ton. These were the first new orebodies discovered in 32 years (1965-1996) since the Fowler and Upper Fowler orebodies were found. As mining proceeds and provides new access for underground drilling it is highly likely that additional "parent-daughter" targets will be established related to these four new ore zones.

4.5 DISTRICT EXPLORATION POTENTIAL
The success of the application of the new exploration model within the Balmat No. 4 Mine area clearly indicates the validity of the model. Three highly prospective areas (Emeryville, Talcville and Cedar Lake) between the Balmat and Hyatt mines (See Figure 4-5) are relatively unexplored because of historic difficulties in determining mineral rights ownerships. The mine staff has now confirmed ownerships, which opens the door for a comprehensive exploration program in these areas. ZCA currently owns 85 of the mineral rights in the Emeryville area, 50 of the mineral rights in the Cedar Lake area, and mineral leases covering the target area in Talcville. Initial exploration work would be the establishment of drill fences perpendicular to structural trends in the three areas with the objective to intersect zinc mineralization in either (1) conformable "parent" source horizons in Units 6, 11, and 14, or (2) cross-cutting "daughter" ore along faults within plunging fold structures crossing Units 6 through 14. In the longer term, a complete re-evaluation of all previous work completed on ZCA's 56,000 acres of mineral rights is warranted and should be completed.