NMTLF New Age Metals Inc (QB)

ITEM 4.          INFORMATION OF THE COMPANY

A.        History and Development of the Company

The Company was incorporated pursuant to the provisions of the Business Corporations Act (Alberta) on May 29, 1996.  The Company amended its articles by certificate of amendment dated October 22, 1997 to remove the private company restrictions.  On July 13, 2004 the Company continued out of the province of Alberta into the province of British Columbia pursuant to the Business Corporations Act (British Columbia).

The Company's registered and executive office is located at 650-555 West 12th Avenue, Vancouver, British Columbia, Canada V5Z 3X7, telephone (604) 685-1870, facsimile (604) 685-6550.

The Company is a reporting issuer in the provinces of Alberta, British Columbia and Ontario, Canada.

The Company’s common shares traded on the Toronto Venture Exchange from December 19, 1997 and on the Toronto Stock Exchange (“TSX”) from June 8, 2001, under the trading symbol “PFN”; on the Over-the-Counter Bulletin Board (“OTCBB”) since August 30, 2001 and the OTCQX™ since October 26, 2010 under the trading symbol “PAWEF”; and are included for trading on the Frankfurt Stock Exchange, Open Market, under the trading symbol “P7J.F”.

B.         Business Overview

The Company is a mineral exploration company focused on the acquisition, exploration and development of platinum group metals (PGMs), precious and base metals minerals properties.

The Company has not determined whether these properties contain ore reserves that are economically recoverable and the Company is considered to be in the exploration stage.

Management's corporate philosophy is to be a project generator, explorer and project operator with the objective of optioning/joint venturing projects with major and junior mining companies through to production.

The Company’s primary project is the River Valley PGM project in Ontario.

Exploration on the property is generally not affected by seasonal change, with drill programs being carried out year round and surface bedrock exploration limited only by snow cover and spring thaw conditions. Exploration activities are dependent upon the availability of subcontractors, in particular drilling activities. These sub-contractors are generally available, however, may vary in price depending upon availability. The material effects of government regulations on the Company’s business are disclosed in Item 3 – Risk Factors .

The mineral resources industry is intensely competitive and the Company competes with many companies that have greater financial resources and technical facilities.

C.        Organizational Structure

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The Company owns 100%  of Pacific North West Capital Corp. USA, and  100% of Pacific North West Capital de México, S.A. de C.V. in México (Mr. Harry Barr, CEO of the Company, owns 0.02%).

D.        Property, Plants, and Equipment

PFN rents executive and administrative office space located at 650-555 West 12th Avenue, Vancouver, British Columbia, V5Z 3X7, Canada, for the sum of $18,048.00 per month, subject to annual adjustments.  The Company has a sub-lease agreement with Next Gen Metals Inc. and El Niño Ventures Inc. in which each pays 25% of the total lease payments of the office space.

Mineral Properties

None of the Company’s mineral exploration properties contain a known commercially mineable mineral deposit.

ONTARIO, CANADA

(I)        River Valley PGM Project

The River Valley mineral claims are located in the Sudbury Region of Ontario.  PFN optioned the River Valley claims following the discovery of highly anomalous PGM values in grab samples in the Dana Lake and Azen Creek areas.  By an agreement dated January 15, 1999 and amended March 11, 1999 (collectively, the “Agreement”), the Company acquired a 100% interest in the River Valley claims from Bailey Resources Ltd., Luhta Resources Ltd. and Pardo Resources Ltd. by issuing 600,000 common shares of PFN and $265,000 in cash over four years. The River Valley claims are subject to a total 3% NSR, of which PFN can purchase up to 2% of the NSR from the vendors for $2,000,000.

On July 14, 1999, PFN entered into an unincorporated 50/50 joint venture agreement (“JV”) over the River Valley property with Kaymin whereby Kaymin was responsible for funding all exploration to completion of a feasibility study, which would give Kaymin an additional 10% interest. In addition, if Kaymin arranged financing for a mine, it would receive another 5% interest, for a total interest of 65%. 

Kaymin continued to fund exploration under the terms of JV until 2007 and invested over $22M in the exploration of the property; however, as a result of capital expenditure reductions during the global financial crisis in 2008, no new funds were allocated to the River Valley Project above and beyond the minimal holding costs.

By way of a Mineral Interest Assignment Agreement dated for reference December 13, 2010, as amended April 6, 2011 (“Assignment Agreement”), on April 7, 2011, PFN completed the purchase from Kaymin of Kaymin’s 50% interest in the River Valley claims, providing PFN with an undivided 100% interest in the River Valley PGM Project.  Under the terms of the Assignment Agreement,  Kaymin exchanged its 50% interest in the JV, for a 12% interest in PFN, based on the issued and outstanding common shares of PFN as of November 30, 2010 (67,543,008 common shares). The aggregate purchase price for the 50% interest in the River Valley PGM project was:

There are no other encumbrances on the River Valley PGM Project associated with the terms of the Assignment Agreement, after an 18-month early disposition period lapses, and there are no back-in rights or take-off agreements between PFN and Kaymin.

In addition to the River Valley claims, PFN holds various other properties that together comprise the River Valley Project as shown below:

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Location Map of River Valley PGM Project relative to the metallurgical facilities in the greater Sudbury region.

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Property Location and Access

The River valley project is located in the Dana and Pardo townships of Northern Ontario, approximately 60km east of Sudbury, Ontario. The project is road accessible in Canada's premier Ni-Cu-PGM mining and smelting district which boasts perfect infrastructure and community support for mining activities.

Property and ownership:

River Valley PGM Project is 100% owned by Pacific North West Capital Corp.  The project is under two Mining leases. The Mining Leases cover an area of 5381.1 hectares, including 4,756.2 hectares of Surface and Mining Rights and an additional 624.9 hectares of Mining Rights. The Mining Leases cover all of the NI43-101 mineral resources of the River Valley PGM Project.

The River Valley PGM project was acquired in 1998 by PFN through a number of transactions. PFN discovered significant PGM occurrences on the property and entered into a joint venture agreement with Anglo Platinum in 1999. PFN remained operator of the joint venture.

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In January 2011, Pacific North West Capital Corp. successfully negotiated the 100% acquisition of the Project from Anglo Platinum Limited.To the best of PFN’s knowledge there are no environmental or other liabilities associated with the River Valley Joint Venture claims.

All exploration to date has been carried out with appropriate work permits from the Ontario Ministry of Natural Resources.  For the future exploration activities a more elaborate permit may be required, but to PFN’s knowledge there is no impediment to receiving one.

Claim list and anniversary dates - River Valley

Climate and Local Resources

Climate is temperate, with four distinct seasons, typical of the Southern Shield, and moderated by the proximity to the Great Lakes.  Other than over small lakes, drilling and geophysical surveys can be carried out year round from skidder roads.  Drilling water is sufficient.  Surface bedrock exploration can be done for about 7‑8 months of the year.  An environmental base line study has not been necessary to date.

Infrastructure

Sudbury, a major mining and manufacturing city, can provide all of the infrastructure and technical needs for any exploration work.

Physiography

The property lies at a mean elevation of about 325 metres (m) ASL. Relief is moderate and typical of upland Precambrian Shield topography.  The eastern part around Azen Creek is lower and marshy.  Forest cover is mainly poplar with about 25-33% white pine regrowth.

Outcrop exposure on the property is limited to about 20% with the remaining areas covered mostly by a thin (<1 m) veneer of glacial till; locally gravel, outwash sand and silt reach 10’s of metres in thickness.  Most of the area around the Dana Lake and Azen Creek areas has been logged within the past 10 years and new logging took place in the Azen Creek Area during the summer of 2000.

History and Previous Work

In 1973, the Province of Ontario placed more than 110 Townships in a withdrawn area referred to as the “Temagami Land Caution” – this region was excluded from any type of resource exploration and/or development until June 1996.  The River Valley Property was covered by this withdrawn area and as a result, most of the River Valley Intrusion was never explored for its PGM-Cu-Ni potential.

The earliest recorded work on the River Valley property was by Kennco Explorations (Canada) Ltd. in 1968, at which time they conducted an airborne Mag-EM survey over Janes, Davis, Henry and Dana Townships. 

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Geological Setting

Regional Geology

The River Valley property is primarily underlain by rocks of the RVI, a large Paleoproterozoic intrusion that forms part of the Huronian-Nipissing Magmatic Province or the Huronian Metallogenic Province.

Local Geology

The RVI covers more than 100 square kilometres (km ²⁾ and lies adjacent to, and straddles, the Grenville Front within the Grenville Province and the Grenville Front Tectonic Zone (“GFTZ”).  The GFTZ represents a complex zone, several km wide and consisting of generally southeast-dipping imbricate thrust faults.  In the area of the River Valley property, the GFTZ is located along the westernmost edge of the claims where it is represented by a system of eastward-dipping (10-25°) thrust faults.  This fault system separates the intrusive rocks of the RVI from younger sedimentary and intrusive rocks of the Huronian Supergroup (includes Nipissing Diabase). It is likely that intrusive rocks of the RVI interdigitated within Huronian rocks along the fault-bound western contact.

Within Pardo Township, a north-trending apophysis of the RVI appears to be in fault contact with older (Archean Superior Province) mylonitic granitic rocks.  In Dana Township the western boundary is in fault contact with rocks of the Southern Province, and the eastern and northern boundaries are in igneous contact with Archean migmatite and paragneiss of the Superior Province.  The eastern and northern boundaries were previously mapped as being in contact with rocks of the Grenville Province.

The RVI can be separated into two main areas on the basis of structural coherence and preservation of primary igneous features such as contacts and layering.  The eastern part of the RVI, located primarily in Dana and Crerar Townships, is represented by the best preserved portions of the intrusion and as such the most prospective areas for discovery.  PFN’s River Valley property covers about 40% of this area including about 10 km of highly prospective northern igneous contact.  Further to the west, in Henry, Janes, Loughrin, Street and Awrey Townships, the geology of the western part of the RVI is complicated by the effects of Grenville metamorphism.  In this area the rocks are attenuated, folded and structurally modified such that most of the primary features are absent.

Property Geology

The River Valley property as mapped by the Company, includes three main mineralized areas with anomalous PGM-Cu-Ni sulphide mineralization: the Dana Lake Area, Lismer’s Ridge, and Azen Creek Area.

The Dana Lake Area of the River Valley property lies within a north-trending portion of the River Valley Intrusion (RVI). This region of the RVI likely represents an offshoot of the main intrusive body and appears to be an up-thrust and rotated portion of the intrusion.  In its current position, the Dana Lake Area represents a lower stratigraphic position in the intrusion that is now oriented sub-vertical relative to its original, near-horizontal position.  The basal contact of the intrusion undulates in both the horizontal and vertical direction and this undulation is probably a primary igneous contact feature.  However, the area has been structurally disturbed with evidence for dip-slip, strike-slip and rotational displacement on the centimetre to metre scale.  Steeply dipping (>80°), decimetre- to metre-scale, modally layered rocks of the River Valley intrusion overly the contact-related, mineralized breccia unit and are truncated along the western edge of the intrusion by the Grenville Front Fault.

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Mineralization

An economically important feature commonly shared by the Agnew Lake, East Bull Lake and River Valley Intrusions is the occurrence of a copper-nickel-PGE bearing breccia unit situated at the base of the intrusions, where the footwall contact is preserved. The breccia units are characterized by inclusions of footwall and cognate mafic to ultramafic xenoliths and autoliths set within a gabbronorite to olivine-bearing gabbronorite matrix. Near the contact, marginal footwall breccias and zones of extensive footwall dikes may also be present. Blebby to disseminated chalcopyrite and pyrrhotite, typically in modal amounts from 0.5 to 2%, occur in the matrix of the marginal and brecciated rocks and occasionally within the breccia’s more mafic fragments. This sulphide mineralization commonly contains between 1 g/t and 5 g/t combined platinum-palladium-gold. On the basis of work completed to date, several important observations and conclusions can be made regarding the geological environment of the contact-type PGM-copper-nickel sulphide mineralization on the Property:

• The Breccia Zone (approximately 10 to 195 m intersections), which includes the main mineralized breccia or Main Zone, has relatively consistent, elevated PGM values. The Main Zone occurs within about 20 m of the intrusive contact with Archean paragneiss and migmatite.
• The Inclusion-Bearing Zone (approximately 1.0 to 100 m intersections) is variably mineralized and has scattered, elevated PGM values.
• Sulphide contents generally range from 1 to 5% total sulphide but can be as high as 10% when occurring as localized clusters of disseminated and bleb sulphide. There is a moderate correlation between PGM-bearing sulphide mineralization and patches of blue-grey quartz (referred to as cauliflower) and/or elevated biotite concentrations.
• The majority of sulphide mineralization occurs as magmatic sulphide grains that are primarily disseminated and bleb textured, with subordinate nettextures. Principal sulphide minerals are chalcopyrite, pyrrhotite, and entlandite with subordinate pyrite, cubanite and bornite.

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• Although the mineralized sections at the Dana Lake Area and Lismer Ridge are broadly similar, there are several notable differences. Mafic rocks at Lismer Ridge commonly develop a moderate foliation and tend to have a higher proportion of chlorite and biotite. There is also a higher proportion of visible chalcopyrite relative to pentlandite + pyrrhotite at Lismer Ridge and chalcopyrite is more commonly re-crystallized along foliations. At Lismer Ridge, blue quartz is not as prolific within the mineralized sections. These differences are likely the result of a slightly higher metamorphic grade at Lismer Ridge (mid- to upper-amphibolite facies), relative to the Dana Lake Area (greenschist facies). The zones of mineralized breccia starting in the northwest and proceeding to the southeastern extent of the contact on the Property are: Dana North, Dana South, Banshee, Lismer’s Extension, Lismer’s Ridge, Varley, Azen, Jackson’s Flats, and Razor (Figure below)

Joint Venture Exploration Programs (1999-2008)

Phase 1 Surface (July – December, 1999 )

The Phase1 Surface program commenced on December 15, 1999 and included:

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More than 2300 surface samples (27 grabs from regional prospecting, 392 grabs from grid prospecting, and 1636 samples from detailed sampling) were collected during the exploration program.  Background was calculated to be 7 ppb Au, 25 ppb Pt, 23 ppb Pd, 1 ppb Rh, (57 ppb 4E), 82 ppm Cu and 137 ppm Ni; average ratios include 0.82 Pd:Pt and 0.81 Cu:Ni.

Regional prospecting led to the discovery of 2 new areas of highly anomalous PGM values:

 The highest value from surface sampling was 12.11 g/t 4E, collected from a ridge several metres south of the Central Zone.

Detailed sampling of cleared outcrop areas returned highly anomalous average values from the 2.5m x 2.5m sample grid: all 1636 detailed samples averaged 958 ppb 4E; 632 samples from the South Zone averaged 975 ppb 4E; 99 samples from the Trench Zone averaged 1168 ppb 4E; and, 165 samples from the Central Zone averaged 1449 ppb 4E.  The highest surface sample was 16.4 g/t 4E (South Zone).

Phase 1 Drilling (February – March, 2000)

The phase 1, 2000 m and 13 hole drilling program was completed between February 28and March 2000.  The program concentrated on mineralization at the Dana Lake Area (claim S-1229230).  A total of 1649 samples were taken from split drill core and sent to XRAL Laboratories in Rouyn-Noranda, Quebec for Pt-Pd-Au-Rh-Cu-Ni assay.

Drilling program was very successful and the highest drill samples was 10,206 ppb 4E (Au+ Pt+Pd+Rh) over 2.3 metres.

Phase 2 Drilling (June – July, 2000)

Phase 2 drilling concentrated on mineralization at the Dana Lake Area (claim S-1229230) where PGMs are associated with disseminated Cu-Ni sulphide mineralization that is hosted by mafic magmatic breccia which is proximal to the footwall contact.  The Phase 2 program was designed to augment Phase 1 drilling, testing the down dip extension of surface mineralization and in-fill drilling of untested areas.

The Phase 2 program consisted of 2820.8m in 14 holes and was completed between June 12 ^th and July 18 ^th , 2000.  Core logging and sampling was fully completed by October 15 ^th ; drill hole RV00-03 was extended 27.3 m.  A total of 2177 samples (2158 from RV00-14 to 26 and 19 from RV00-03) were taken from split drill core and sent to XRAL Laboratories (Rouyn-Noranda, Quebec & Don Mills, Ontario) for Pt-Pd-Au, Rh and Cu-Ni assays.  A total of 296 pulps were sent to Accurassay Laboratory in Thunder Bay for sample check assays.

Significant intervals were encountered in holes number DDH 15, 20 and 25 with 1143.2 ppb 4E over 39.10m, 2342.9 ppb 4E over 15.85 and 1948.2 ppb 4E over 11.10 meters respectively.

Phase 3 Drilling (September 2000)

Phase 3 drilling consisted of 10 drill holes at the Dana Lake Area (claim S-1229230) and 3 drill holes at Lismer’s Ridge (claims S-1229542 & S-1229216).  In both areas, PGMs are associated with disseminated and bleb Cu-Ni sulphide mineralisation that is hosted by a heterolithic breccia which is proximal to the intrusive contact.  The Phase 3 program was designed to augment Phases 1 & 2 drilling, testing the down dip extension of surface mineralisation and in-fill drilling of untested areas at the Dana Lake Area, and testing newly discovered surface mineralisation at Lismer’s Ridge.

The Phase 3 program (1958.50 m in 13 holes) was completed September 6 - 25, 2000; core logging and sampling was fully completed by October 30, 2000.  A total of 1142 samples were collected from split drill core and assayed for Pt, Pd, Au, Cu and Ni at XRAL Laboratories (Rouyn-Noranda, Quebec & Don Mills, Ontario).

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Significant intervals were encountered in holes number RV0028 and RV0036, with 1022.2 ppb 3E (Au+Pt+Pd) over 42.35m, including 1386.4 ppb 3E over 7.85m and 7215.8 ppb over 8.8m respectively.

Phase 2 Surfaces (March – October, 2000)

The Phase 2 program consisted of:

Detailed sampling produced a total of 2133 samples; 831 were collected from newly cleared areas in the Dana Lake Area (S-1229230); 1282 samples were collected from Lismer Ridge (S-1229542, S-1229216).  Regional mapping and prospecting produced an additional 233 samples from regional work across the property.

Phase 4 Drilling (February – July 2001)

The Phase 4 program was separated into two time blocks, to accommodate for the changing weather conditions between seasons:  February 1 ^st to March 21, 2001 and May 14 - July 2001.  Core logging and sampling was fully completed by August 31, 2001.  A total of 10,529 samples from Dana and 7,501 from Lismer Ridge were collected from split drill core and assayed for Pt, Pd, Au, Cu and Ni at XRAL Laboratories (Rouyn-Noranda, Quebec & Don Mills, Ontario).

The highest value from drilling program was as follow:

3.7 g/t 3E over 71.4m including 9.6 g/t 3E over 4.2m in DL-08 drilled in Dana Lake Area and 4.71 g/t 3E over 18 metres including 13.2 g/t 3E over 5.2m and 28.14 g/t over 2m in hole number LR-02 drilled in Lismer Ridge Area.

At the completion of Phase 4 Drilling, an Independent Mineral Resource Study was carried out by Derry Michener Booth and Wahl (DMBW), which incorporated assay data from the 138 holes drilled to date on the property.  The Report estimated an in situ resource at Dana Lake and Lismer Ridge totaling ~593,000 ounces (Pd+ Pt+ Au) at a 0.7 g/t cut-off in 12 million tonnes (measured + indicated + inferred).  The report notes that “there is significant potential to increase resources on the property through further drilling both along strike from and down dip on the currently defined mineralized zones”.

Phase 3 Surface (June – September, 2001)

During the Phase 3 program a total of 1,111 samples were collected from the property with concentrations in the south eastern and western contact areas.

The highest value from surface sampling was 3.9 g/t 3E, collected from the Razor area.

Phase 5 Drilling (November, 2001 – August, 2002)

This Phase 5 program was completed in its entirety between November 17, 2001 and August 31, 2002; drilling was employed from November 22, 2001 to June 24, 2002 (Part 1: November 22, 2001 to March 3, 2002 and Part 2: April 21, 2002 to June 24, 2002).

A total of 22,319 core samples were collected consisting of 10,325 from Lismer Ridge, 10,289 from Dana South, and 1,705 from Banshee Lake.  The core samples were collected from split drill core and assayed for Pt, Pd, Au, Cu and Ni at XRAL Laboratories, located in Rouyn-Noranda, Quebec and Don Mills, Ontario.

Highlights from Phase 5 Drilling: Dana Lake Area, River Valley Property (weighted averages).

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Highlights from Phase 5 Drilling: Lismer Ridge Area, River Valley Property (weighted averages).

Phase 4 Surface (October – December, 2002)

This program was completed on the River Valley property between October 15 and December 31, 2002, and included 1) regional geological mapping and sampling;  2) stripping, detailed mapping and sampling;  3) line cutting, and induced polarization and ground magnetometer geophysical surveys.

A total of 483 samples were collected; 395 grab samples from regional mapping and 88 samples from detailed sampling and mapping.

Of the 395 grab samples, 394 samples assayed from lower limit of detection to 250 ppb 3E (Pt, Pd, Au); 1 sample assayed between 251-500 ppb 3E, (Jackson’s Flats area - 12 ppb Au, 280 ppb Pt, 77 ppb Pd, 4.9 ppm Cu and 10 ppm Ni).

Of the 88 samples that were collected during detailed sampling, the highest value of PGM was 601 ppb Au, 2240 ppb Pt, 2950 ppb Pd, 2540 ppm Cu, and 76 ppm Ni.  This sample was collected at the Banshee South trench.    

Phase 6 Drilling (November 2002 – May 2004)

Phase 6 consisted of 44,131 metres in 208 holes:

• 70 drill holes at Dana Lake
• 15 holes at the Banshee Lake
• 41 drill holes at Lismer Ridge
• 7 holes at the MacDonald
• 32 holes at Varley
• 16 holes at Azen Creek
• 10 holes at Razor
• 13 holes at Jackson’s Flats
• 4 holes at Pardo

A total of 40,131 core samples were collected.  The core samples were collected from sawed drill core and analyzed for Pt, Pd, Au, Cu and Ni as part of a 33 element ICP package at XRAL Laboratories, located in Rouyn-Noranda, Quebec and Don Mills, Ontario.

Phase 5 (July 2003)

Spectrem Air Ltd., based in Lanseria, South Africa, flew airborne mag, EM and radiometric surveys over the River Valley property.

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Phase 6 Surface (May to October 2004)

The Phase 6 Surface consisted of extensive geological mapping of the eastern portion of the property along the northern contact and the interior of the River Valley Intrusive.  The mapping successfully traced the mineralized Breccia Zone along the northern RVI-Archean contact from the south Varley area through to the Razor area.  Assays values from the Breccia Zone were often highly anomalous, with maximum returned values of 4,114 ppb 3E (Pt+Pd+Au).

Untested, potential reef-type mineralization is interpreted to occur where the Marginal Leucogabbronorite Unit is interlayered within the Olivine Gabbronorite Zone near the base of the Layered Series on the south flank of the Turtle Creek Syncline in the South Jackson’s Flat West area.  This interpretation is supported by a significant number of historic geochemical samples taken from this area, which returned Pt + Pd + Au values of greater than 100 ppb.

Mapping in the Azen-Spade Lake and South Azen areas has identified a new mineralized zone straddling the contact between the Layered Gabbronorite Zone and the Upper Leucogabbronorite/Anorthosite Unit.  In the North Spade Lake, South Spade Lake and South Azen showing areas, significant PGE values (to 1696 ppb Au+Pt+Pd) have been returned from coarse-grained pyroxenite pegmatite layers and lenses interlayered with norite and gabbronorite near the top of the Layered Gabbronorite Zone and into the base of the overlying Upper Leucogabbronorite Unit.  This mineralized zone is termed the “Transition Zone” and is a target for reef-type PGE ores in the Upper River Valley stratigraphy.  The Thomson claims are now recognized as a potential Transition Zone target.

A Phase 7 exploration program was completed on the property during 2004 and mid 2005. The program completed 20,740 m of diamond drilling, metallurgical testing and the collection of a 40 tonne bulk sample for metallurgical testing on the Dana North and Dana South Zones. The budget was set at $3.0 million dollars.

In the Phase 7 program particular emphasis was placed on expanding targets identified by reconnaissance drilling, geophysics, and geological mapping especially along the northern contact of the intrusive. The known platinum, palladium mineralization has been identified within the contact breccia zone over a strike length in excess of 15 km. The mineral resource estimates have been primarily concentrated in the Dana Lake and Lismer’s Ridge Zones over a 3 km strike length.

In 2005-2006 (Phase 8), additional mapping and drilling was carried out.  In 2006 and 2007 (Phase 9), further mapping and detailed sampling was completed.

In 2005 a $1.5 million budget (Phase 8) was approved by the joint venture. The program included the processing of the bulk sample at Anglo Platinum’s facilities in South Africa, and additional surface detailed mapping and geophysical work.  A series of drill holes were completed at the end of 2005 to test geological interpretations for the mapping programs.  A series of these drill holes located south of the Azen zone intercepted mineralized breccias and horizons within the River Valley Intrusive.

In 2006 the joint venture has authorized a further $1.1 million (phase 9) lease survey and mapping program to determine the controls on mineralization within the intrusive complex.   At the end of 2009 it is expected that the JV will be in a position to receive a lease on the property from the Ontario Government.

Exploration programs completed on the property during 2007 were directed towards evaluating the potential of PGE mineralization within central portion of the River Valley Intrusive. The programs of prospecting, geological mapping, stripping, and channel sampling were designed to determine the continuity of indicated surface mineralization. The leasing process of the property continued.  The budget was set at $525,000 dollars.

In 2008, a channel sampling program was completed in selected areas to allow comparison of grade estimates obtained using different sampling methods. A limited suite of samples were assayed by the Nickel Sulphide collection fire assay method for comparison with the lead collection fire assay method used in previous years, as well as to obtain better estimates of Osmium, Iridium, Rhodium and Ruthenium concentrations in the mineralization. In addition, a consulting geologist was contracted to review prior year’s exploration work to identify areas where additional work was needed.

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In late 2008, Kaymin informed the Company that, due to the global economic downturn and concomitant drop in metal prices, Kaymin wished to temporarily suspend expenditures on the project other than those needed for normal maintenance of the property. As a result, the Company closed its Sudbury exploration office. A budget of $285,000 was apportioned to allow for compilation and archiving of data collected from the various phases of exploration and drilling, and to provide for property maintenance.

In 2008, a consulting geologist was engaged to review the work completed to date and recommend a future course of action. As part of this study, selected trench areas were re-sampled in detail to compare different sampling methods for consistency. A structural review was also completed.

A further $245,000 budget was approved for the project in 2009 to carry out reclamation work on the River Valley property. As of February 28, 2009, the process of archiving material, storing equipment, and shutting down operations in Sudbury was complete. Reclamation work was completed in August 2009.

An additional $150,000 budget was allocated to fund a detailed geochemical study of the River Valley mineralization was conducted by Dr. Reid Keays of Monash University, Melbourne, Australia. Dr. Keays is an expert in the geochemistry of Ni and PGM deposits. Re-sampling of selected River Valley drill holes was completed in January, 2009, and of the 336 samples were submitted to the Ontario Geoscience Laboratories for analytical work, 154 results have been received to date. In order to improve economy modelling of the deposit the study examined the full suite (Pt, Pd, Rh, osmium, iridium, and ruthenium) PGM content of the ore, and determined the relationship of Rh, iridium and ruthenium concentration from Pt and Pd.

2011 Exploration Program

After Pacific North West Capital Corp. acquired 100% of the project, the company announced that it commenced a five million dollar 15,500 metre exploration program for its 100% owned River Valley PGM Project. During 2011 exploration, PFN completed more than 15,500 metre of drilling and more than 140 line km of 3D IP geophysics survey. Following is a summary of the program achievements;

Resource Drilling, 13,500 metres

• Focused in the Dana North and Dana South zones
• Infill drilling to advance inferred to indicated resources, increase grade and close gaps
• Proximal targets drilled along strike and down-dip to expand current (2006) mineral resources

Exploration Drilling, 2,000 metres

• Commenced on completion of the resource drilling
• Drill one new 3D IP chargeability target
• Drill two under explored targets identified from surface mineralization internally within the intrusion not drilled previously

  Geophysical Surveys

• During resource drilling, 130 line km of ground 3D IP surveys completed to generate new targets
• New targets identified, ranked and prioritized for drill testing ( Figure below)

Other Activities

• Environmental baseline studies

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  Geology Map of River Valley Project

The 2011 drilling program carried out on the Property commenced on April 6, 2011 and was completed on January 13, 2012. Foraco Drilling Ltd., based out of North Bay, Ontario, was contracted to carry out the diamond drill program using a hydraulic VD 5000 diamond drill rig. A total of 46 holes were drilled during three phases of the program totalling 12,767 m of NQ sized core. Dip tests were taken approximately every 50 m with a FLEXIT and later a REFLEX tool. Holes varied in length from 75 to 690 m.

This program was implemented over three stages with each stage having somewhat different but overlapping objectives. The diamond drill program was undertaken in the Dana area of the Property and completed between April 6 and mid-November 2011 (Table 10.2 and Figure 10.1). Main objectives were to:

• improve the confidence of the resource estimates and grade calculations, as well as possibly improve on the existing computations

• test deeper lying portions of the contact for improved grades and widths.

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2011 Drill Results

Drilling continued to establish continuity between previously-identified mineralized intercepts on the deposit. At shallow to moderate depths, drilling encountered moderate- to high-grade gold mineralization in most of the holes drilled. Low-grade gold mineralization ranging 0.5 to 1.5 g/t was encountered over wide intersections in many of the holes ranging 8 to 25 m in length. In some holes, multiple wide low grade zones were cored.

2011 Drill Collar Locations

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Discussion

Work to date at River Valley suggests that the best potential for economic accumulations of PGM‐Cu‐Ni sulphide mineralization is within the Breccia Zone. This zone includes the main mineralized zone. The main zone occurs within about 20 m of the intrusive contact with country rocks. This contact zone extends for over 9 km of prospective strike length and hosts the currently defined resource.

Target areas on IP map

Main Zone of the breccia‐hosted PGM mineralization averages 20‐50 m in thickness, continues to depths of greater than 200 m, and is for the most part open along strike and downdip. In addition, the drilling demonstrates predictable grade to depth with significant high grade intersections (5‐10 gpt 3E over 1‐5 m & 3‐5 gpt 3E over 5‐10 m) enveloped by broader (commonly >20 m and sometimes >100 m) lower grade (1.0‐1.5 gpt 3E) intersections.

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The continuity of mineralization and the remarkable consistency in the geology and stratigraphy along strike and at depth, suggests that there is significant potential to increase resources on the property through further extensional drilling away from the currently defined mineralized zones. Deeper holes confirmed the presence of mineralization at depths greater than 350 m (down dip and down plunge). There is a general correlation between three dimensional induced‐polarization (3D‐IP) geophysical survey anomalies and PGM sulphide intersections.

The intersections for most of the holes correlate with relatively high chargeability, an indication of disseminated sulphide.

2012 Mineral Resource Estimate (NI 43-101 compliant):

The detailed results of the new mineral resources estimate for the River Valley PGM Project are presented in the table below. This NI43‐101 compliant mineral resource estimate was completed by Tetra Tech, Sudbury. The new estimate incorporates the 13,140 metres in 46 holes drilled in the Dana North and Dana South Zones since the May 2006 estimate.  All 462 holes were drilled at a nominal drill section spacing of 25 metres to 100 metres on the eight separate mineralized zones shown in Figure below.

The estimated NI43‐101 compliant Measured and Indicated mineral resources at a cut‐off grade of 0.80 g/t PdEq have increased by 470% from the previous mineral resource estimate filedMay 2006 to 91,339,500 tonnes grading 0.84 g/t Pd+Pt+Au, 0.06% copper, 0.02% nickel and 0.002% cobalt. The compliant Inferred mineral resources have increased by >1000% to 35,911,000 Mt grading 0.53 g/t Pd+Pt+Au, 0.06% copper, 0.03% nickel and 0.002% cobalt.

The mineral resources were estimated using Datamine Studio3(c) software and are reported at a cut‐off grade of 0.8 PdEq. The 0.8 g/t PdEq cut‐off was used pending future assessment of the economics and development potential of River Valley as an open pit mining project. The Company considers the 0.8 g/t cut‐off value to be appropriate because: 1) the PdEq grade is 1.38 g/t for Measured and Indicated and 1.07 g/t for Inferred resources; and 2) rhodium and silver are not included in the PdEq calculation.

Comparisons are made above to the previous NI43‐101 compliant River Valley mineral resource estimate of May 2006 (Technical Report by GeoSIMS available on PFN's SEDAR and EDGAR profile and on the Company's website). The large increase in the mineral resources reported herein is explained by the combined effects of:

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NI43‐101 Compliant Mineral Resources for the River Valley PGM Project, Sudbury, Ontario

Notes to Mineral Resources in Table:

1. The mineral resource estimates in this press release use the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by CIM Standing Committee on Reserve Definitions and adopted by CIM Council on November 27, 2010. The mineral resource estimates provided in this report are classified as "measured", indicated", or "inferred" as defined by CIM. According to the CIM definitions, a Mineral Resource must be potentially economic in that it must be "in such form and quantity and of such grade or quality that it has reasonable prospects for economic extraction".

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2. For the River Valley project, a palladium equivalent (PdEq) cut ‐ off grade was assigned based on economic assumptions from comparisons to other projects, and was used in the resource estimations. Resources reported in this press release use a cut ‐ off of 0.80 g/t PdEq. Grades have assumed 100% recoveries. The parameters used to generate the PdEq value are provided below:

PdEq=( (Au grade*$Au*Factor1)+(Pt grade*$Pt*Factor1)+(Pd grade*$Pd*Factor1)+(Ni grade*$Ni*Factor2)+(Cu grade*$Cu*Factor2)+(Co grade*$Co*Factor3))/($Pd*Factor1)
$Au = US$1271 per oz.
$Pt = US$1885 per oz.
$Pd = US$896 per oz.
$Ni = US$ 9.74 per lb.
$Cu = US$3.00 per lb.
$Co = US$15.90 per lb.
Factor1 = 0.0321508 (converts ounce per tonne to grams per tonne)
Factor2 = 22.04622 (converts pounds to grade percent)
Factor3 = 0.002205 (converts pounds to ppm)

3. The mineral resources were estimated using a block model with parent blocks of 10m x 10m x 5m and using ordinary kriging (OK) methods for grade estimation. A total of eight individual mineralized domains were identified. The determination technique of the mineral resource is based on the combination of geological modelling, geostatistics and conventional block modelling using the OK method of grade interpolation. The block model resource estimate prepared by the Tetra Tech, was based on more than 96,980 metres of diamond drilling in 462 diamond drill holes. The assay data was reviewed and a composite interval of 2.0 metres was used.

Statistical and Variogram analyses were performed to determine the "nugget effect".

4. Rhodium grades were not estimated by the OK methodology. Rhodium values were determined using a regression formula based on the platinum and palladium grades. Rhodium values are not incorporated into the PdEq value. The PdEq value also does not include silver.

5. The QAQC protocols and corresponding sample preparation and shipment procedures for the River Valley Project have been reviewed and approved by Tetra Tech.

2012-2013 Metallurgical Studies;

In September 2012, two diamond drill holes were drilled inside the River Valley deposit; one at Dana North and the other 600 metres to the south at Dana South.  The holes were planned to validate the geological models and maximize amount of mineralized sample material for the metallurgical test-work study.  Dana North and Dana South were selected for drill sampling because they are the most accessible and best understood of the eight known PGM mineralized zones, and therefore the likely starting location of any potential mining operation at River Valley. The hole at Dana North was drilled for 300 metres obliquely down-dip where the zone shows a consistent orientation laterally. The Dana South hole was drilled vertically for 300 metres in deference to its relatively more irregular orientation laterally. 

The two drill holes each intersected PGM mineralization throughout their entire length. Dana North hole DNZ2012-MET1 intersected 298 metres grading 1.9 g/t Pd+Pt+Au, 0.125% copper and 0.024% (i.e., 2.9 g/t PdEq) nickel from 2 metres down-hole.  This long intersection included: 23 metres grading 2.5 g/t Pd+Pt+Au, 0.151% copper and 0.033% nickel from 126 metres down hole (i.e., 3.8 g/t PdEq); and 144 metres grading 2.6 g/t Pd+Pt+Au, 0.156% copper and 0.028% nickel (i.e., 3.9 g/t PdEq) from 156 metres down hole.  The hole ended in PGM mineralization.

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Dana South hole DSZ2012-MET1 intersected 299 metres grading 1.2 g/t Pd+Pt+Au, 0.076% copper and 0.016% nickel (i.e., 1.9 g/t PdEq) from 1 metre down hole (Table below).  This intersection included: 1) 46 metres grading 2.8 g/t Pd+Pt+Au, 0.168% copper and 0.031% nickel (i.e., 4.2 g/t PdEq) from 1 metre down hole; and 2) 90 metres grading 1.8 g/t Pd+Pt+Au, 0.096% copper and 0.018% nickel (i.e., 2.6 g/t PdEq) from 149 metres down hole.  Lithologically the Dana South hole intersected more rock types than the Dana North hole, but it also ended in PGM mineralization.

Each hole provided approximately 700 kg of core material, allowing for: 1) extensive test work on a single composite sample from each zone plus an overall composite sample of the two zones; and 2) comprehensive assaying and QEMSCAN studies to follow the PGM during the test work.

The holes were drilled in July 2012 using a single drill rig operated by Major Drilling.  After logging, each of the drill cores was cut into equal halves with a diamond saw. Half of the core was sent to SGS Canada Inc.’s processing facilities at Lakefield, Ontario for the metallurgical testwork.  The remaining half was cut into equal halves, one of which was kept in storage for reference and the other half sampled at 1 metre intervals and shipped to SGS Canada Inc for sample preparation and assay.  In total, 567 samples from the two drill holes were assayed (plus 63 QAQC samples).

The metallurgical testwork samples were received by SGS Lakefield in early August.  A total weight of 713 kg was received for the Dana North hole and 710 kg for the Dana South hole.  Composite samples for each of the holes (Dana North and Dana South) and for both holes (Dana North plus Dana South) were prepared, for a total of three samples.  The prepared composite samples are stored in freezer storage. 

Mr. Al Hayden, P.Eng. and Associate of NordPro Mine & Project Management Services (Thunder Bay) was hired by PFN as its metallurgical consultant to supervise the study and review results.

*PdEq=((Au grade*$Au*0.03215)+(Pt grade*$Pt*0.03215)+(Pd grade*$Pd*0.03215)+(Ni grade*$Ni*22.046)+(Cu grade*$Cu*22.046)) /($Pd*0.03215)
where  $Au US$1271/oz, $Pt = US$1885/oz, $Pd = US$896/oz/, $Ni = US$9.74/lb, $Cu = US$3.00/lb

The testwork completed by SGS Canada Inc. (SGS) of Lakefield, Ontario in April 2013 and involved Bond grindability and abrasion studies, sample compositing, physical and chemical analyses, and bench scale flotation tests to make high‐grade sulphide concentrate.  Results show that the platinum group metals (PGM) float with copper- Nickel sulphides, and therefore demonstrate potential for a sulphide concentrator to effectively process River Valley deposit material. SGS recommend additional testwork to determine the optimal grind size for PGM separation and further improve concentrate grade and metal recovery. A copy of the SGS report is available for viewing on the Company’s website.

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TESTWORK RESULTS

Metallurgical testwork was carried out on an Overall Composite sample prepared from half-core intervals from the Dana North Zone (DNZ) and the Dana South Zone (DSZ) of the River Valley PGM deposit. Testwork involved mineralogical and chemical analysis, Bond Rod and Ball mill grindability, and Bond abrasion testing on each of the Dana North and Dana South Zone composites. Mineralogical analysis determined that the main minerals are amphibole/pyroxene and plagioclase, consistent with gabbro-norite intrusive host rock type.  Chalcopyrite is the sole copper mineral phase and pentlandite the primary nickel sulphide phase.  However, sulphides hold only 35% to 45% of the total nickel; the remaining percentage is held in silicates and therefore unrecoverable. The Bond rod mill grindability tests at 14 mesh of grind (1180 micrometres) identified each of the two composites as very hard, with Rod Mill Work Index at ~20.0 kWh/t.  A Bond ball mill grindability test at 150 mesh (106 micrometres) identified each of the two composites as hard to very hard, with a Ball Mill Work Index of 18.8 kWh/t for DNZ and 19.5 kWh/t for DSZ.  The  Bond Abrasion tests determined each composite to be in the moderate to hard abrasive range.

Flotation testwork was completed on the Overall composite in order to: 1) develop a viable flowsheet; 2) evaluate parameters such as primary grind and regrind fineness, reagents and dosages; and 3) generate a concentrate that targeted a grade of ~200 g/t PGM.  Eleven rougher kinetics tests were performed to evaluate effective reagents, dosages, flotation time and primary grind fineness. Cleaner tests were undertaken to investigate cleaner circuit configuration, depressants and regrind fineness.  The best test produced a concentrate grading 8.94% copper, 1.22% nickel and 109 g/t PGM at recoveries of 86.8% for copper, 26.7% for nickel and 73.1% for PGM.  

A single locked cycle test (LCT) was completed applying the flowsheet and conditions of the final cleaner test (Figure below).  The primary grind was at P80 = 71 µm and the regrind at P80 = 19 um.  The LCT produced a concentrate grading 15.5% copper, 1.67% nickel and 189 g/t PGM at recoveries of 84.4% copper, 22.2% nickel and 68.7% PGM (Table below). The 3rd cleaner concentrate from the LCT was submitted for multi-element analysis. In addition to platinum, palladium, gold, copper and nickel, which would all be payable, rhodium, cobalt and silver are present a levels which are likely also be payable.  Conversely, contents of magnesium, arsenic, antimony, bismuth, and selenium are all below the problematic limits for marketability.

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Figure. Flow sheet for Locked Cycle Test by SGS.

Table. Metallurgical results for the Locked Cycle Test by SGS.

RECOMMENDATIONS

SGS make the following recommendations for further testwork on River Valley:

1. Further investigate the effect of primary grind size on flotation recovery;

2. Flotation optimization testing in order to achieve further improvement of concentrate grade and metal recovery; and

3. Flotation and grindability variability testing on the composite samples in order to identify the variability of flotation performance. Subsequently, variability testing should be extended to investigate a broader range of samples from each of the mineralized zones at River Valley, to investigate the effect of feed grade and rock type on metallurgy.

Exploration & Development Plans

Plans for the foreseeable future include Phase 2 Metallurgical Studies and execution of the exploration drill program. A detailed plan is in preparation with SGS Canada Inc. for Phase 2 Metallurgical Studies. The testwork will involve an expanded range of samples, grades, rock types and depths for the River Valley deposit. The exploration drill program will consist of up to twenty drill holes, carefully designed to test the best two or three drill targets. Some of the holes will be selected for down-hole induced polarization surveys in order to detect and model the location of off-hole mineralization for subsequent drilling.

PFN's Technical Team seized the opportunity afforded by the slowdown in exploration to reassess the potential exploration upside of the River Valley PGM Project. Compilation and integration of high quality geophysical and drilling datasets produced numerous drill-ready targets along strike, down-dip and in the immediate footwall to the main PGM mineralized zones. The targets have been ranked and prioritized for drill testing. A formal application for an exploration program, including drilling and geophysics, has won approval from the provincial government with input for local communities and Aboriginal Peoples, as mandated under the new mining laws of Ontario.

Figure below illustrates hundreds of anomalies that has been identified internally within River Valley Intrusion ( reefs), adjacent country rocks  (possible magmatic embayments and feeder features) and newly discovered River Valley like intrusions.

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Location of hundreds of anomalies that has been identified in the River Valley Project

Location of the mineralized zones in the Breccia Unit at the base of the River Valley Intrusion, Sudbury area, Ontario.

Non-Reserve Mineral Resource Estimation – Mineral Deposits

SEE “CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING RESERVE
AND RESOURCE ESTIMATES” AND “MINERAL RESERVES –
DEFINITIONS” ABOVE.

The terms “mineral resource”, “inferred mineral resource”, “indicated mineral resource” and “measured mineral resource” have the meanings ascribed to those terms by CIM.

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The following italicized text was excerpted from a report entitled, “ Revised Mineral Resource Estimate, Dana Lake and Lismer’s Ridge Deposits incorporating Phase VI Drilling, River Valley PGM Project, Ontario for Pacific North West Capital Corp ”, dated June 10th, 2004, by Derry, Michener, Booth and Wahl Consultants Ltd. (“Derry, Michener, Booth and Wahl Report”), as filed on Form 20-F on August 9, 2004.

In March 2006 the mineral resources table was updated in the GeoSim Report, as filed on Form 6-K/A on June 6, 2006.  Mr. Simpson was responsible for the calculation of the resource estimate in the Derry, Michener, Booth and Wahl Report.  The GeoSim Report included all of the drill holes from the phase 7 program.

Cut-off Grade

The cut-off grade is the lowest grade of material that can be mined and processed considering all applicable costs, without incurring a loss or gaining a profit. In the subsequent summary of resources, the cut-off grade used for reporting block model statistics within mineralized zone constraints is a combined Pt+Pd grade. The resources within each zone are reported for cut-off grades of 0.7 g/t Pt+Pd and 1.0 g/t Pt+Pd.  The lower cut-off grade of 0.7 g/t Pt+Pd is based on historical resource estimates for the Lac des Iles Mine, which is the only active Pt/Pd producer in Canada. In the resource estimates, no allowance has been made for the respective precious metal prices, or recoveries.

Measured Mineral Resource

A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

Mineralization or other natural material of economic interest may be classified as a Measured Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such that the tonnage and grade of the mineralization can be estimated to within close limits and that variation from the estimate would not significantly affect potential economic viability. This category requires a high level of confidence in, and understanding of, the geology and controls of the mineral deposit.

Indicated Mineral Resource

An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

Mineralization may be classified as an Indicated Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such as to allow confident interpretation of the geological framework and to reasonably assume the continuity of mineralization. The Qualified Person must recognize the importance of the Indicated Mineral Resource category to the advancement of the feasibility of the project. An Indicated Mineral Resource estimate is of sufficient quality to support a Preliminary Feasibility Study which can serve as the basis for major development decisions.

Inferred Mineral Resource

An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.  Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies.

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Cautionary Note to US Investors concerning estimates of Measured and Indicated Resources:

This section uses the terms “measured resources” and “indicated resources”. We advise US investors that while those terms are recognized and required by Canadian regulations, the US Securities and Exchange Commission does not recognize them. US investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.

Cautionary Note to US Investors concerning estimates of Inferred Resources.   This section uses the terms “inferred resources”. We advise US investors while those terms are recognized and required by Canadian regulations, the US Securities and Exchange Commission does not recognize it. “Inferred resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category or will ever be converted into reserves. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or prefeasibility studies, except in rare cases.  US investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally minable.

2011 and 2012 Quality Assurance and Quality Control (QA/QC)

All diamond drill core samples were submitted to SGS Laboratories, Toronto, Ontario and assayed for Pt, Pd, Au, Cu and Ni and a 33 element ICP suite. Concentrations of Pt-Pd-Au were determined using standard lead fire assay, followed by dissolution with acqua-regia, and measurement with an ICP (inductively coupled plasma) finish. Lower limited of detection (30 gram sample) are 1 ppb for Au and Pd and 10 ppb for Pt; upper limits are 10,000 ppb by ICP. Concentrations of Cu-Ni were determined by ICP methods with detection limit of 0.5 ppm for Cu and 1 ppm for Ni; upper limit for both Cu and Ni is 1 %.

One standard and one blank were inserted every 40 samples into the sample stream. Duplicates were taken each twentieth sample. This practice continued throughout 2011 Phase IA drilling and included the preparation and insertion of new and necessary standards at the cut-off grade and at the mean grade of the deposits. All sample preparation has been conducted and directed on site by contract geologists and samplers hired by PFN.

(B) RIVER Valley East and West PGM Project, Ontario

The River Valley West Property is comprised of a contiguous group of 944 mining claims units in 72 mining claims and is located in Davis, Janes, Loughrin and Henry townships. The River Valley East Property claim group consists of 532 mining claims units in 35 claim units that sprawl over parts of Dana, Pardo, Hobbs and McWilliams Townships, Sudbury Mining Division. These claims were staked in May of 2011 (Figure below). The property is situated to the east of the Sudbury Basin and north of Highway 17.  It covers two rock groups that host significant concentrations of PGM mineralization; the River Valley-East Bull Lake Suite of rocks and the Nipissing Gabbro.

River Valley West claims cover branches of the River Valley Intrusion from the main intrusive body that hosts the River Valley PGM resource and intrude Huronian sediments to the west. These units are under explored making them attractive exploration targets. The East Bull Lake Suite has the potential to contain at least two different styles of sulphide mineralization: 1) brecciated contact style mineralization (similar to PFN’s River Valley PGM Project); and 2) reef style mineralization in the interior of these intrusive bodies, at the interface or zone of mixing of magmas of differing composition. The Nipissing Gabbro has been explored for PGM on some areas of the property. Public sector geochemical data from the newly acquired claims indicate widespread anomalous PGM, gold and base metals. Hypersthene-bearing gabbro and contact breccia appear to be the most favourable lithologies within the Nipissing for hosting significant PGM mineralization.

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The company completed a Geo-referencing program over selected claims as outlined in Geo-referencing Standards for Unpatented Mining Claims, Ministry of Northern Development and Mines. This undertaking was initiated on March, 1, 2013 and it was completed on March 21, 2013.  .

Location of the River Valley East and West Properties

A joint venture partner is being sought to further explore the project.

(C) Heaven Lake PGM, Gold Project, Ontario

On June 13, 2011, the Company staked 220 square km 10 km north of Lac des Iles Mine, north of Thunder Bay, Ontario.

The Heaven Lake property is located 130 km north of the city of Thunder Bay and 15 km north of the Lac des Iles PGM Mine. Access is by all‐season paved highways, logging gravel roads and bush trails (Figure 7). The roads and trails link to the access road system for the Lac des Iles Mine.  The Heaven Lake claim group consists of 88 contiguous 16‐unit claims on Crown Lands (1408 units), encompassing an area of 22,528 ha and owned 100% by PFN.

The Heaven Lake Property lies near the boundary of the Archean Superior Province to the west and the Mesoproterozoic Nipigon Embayment to the east (Figure 9). The property is underlain by metamorphosed and deformed Archean volcanic‐sedimentary rocks and intermediate to felsic intrusions of the Wabigoon Terrane. The Archean rocks are disconformably overlain by Mesoproterozoic sedimentary rocks and intruded by Nipigon diabase sills. The latter bodies are related to the ~1100 million‐year‐old Midcontinent Rift (MacDonald et al., 2005).

The exploration targets most commonly noted in the provincial assessment reports are Lac des Iles style PGM mineralization and, more recently, Thunder Bay North style Cu‐Ni‐PGM mineralization. At Heaven Lake, however, Ni‐Cu‐PGM mineralization near the base of the gabbro‐pyroxenite intrusion could possibly indicate different target type. This target area should be ranked highly for IP and time‐domain EM surveys on grids with 100 metre line spacing and, pending results, drill testing. Elsewhere on the Heaven Lake property, geophysical surveys and mapping and prospecting surveys by experienced personnel should be carried out to find and explore other prospective mafic intrusions. An additional focus for exploration should be the unexplained airborne EM anomalies about Whitton Lake.

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The presence of thick overburden and the flat‐lying Nipigon Diabase unit hinders ground geophysical surveys and surface mapping and prospecting work. A modern airborne geophysical survey with higher resolution and increased depth penetration combined with inversion modelling of EM and magnetic anomalies of interest could better focus follow‐up exploration activities on the ground. Indeed, OFR 6164 (MacDonald et al., 2005) reports the presence of a magnetic anomaly at depth beneath the northeastern part of the Heaven Lake Property. Gabbro has been reported in the area, but also present are thick horizons of magnetic massive pyrrhotite associated with chert. The significance of that magnetic anomaly remains to be determined. Inversion modelling combined with physical property studies warrants consideration, as a means of evaluating the potential of the Heaven Lake Property area to hold large mafic to ultramafic intrusions which do not outcrop.

Several exploration companies have recently staked properties around the Heaven Lake Property. These companies include Platinum Group Metals and HTX Minerals Corp., which are known to have interest in Cu‐Ni‐PGMs.

Location of the Heaven Lake Property, northwestern Ontario

(II) Sargesson Lake and Kelly-Davis Properties

Ownership

The Company acquired a 100% interest in certain mineral claims, known as the Sargesson and Kelly/Davis properties, located in the Janes, Davis and Kelly Townships, Sudbury Mining District, Ontario.  As consideration, the Company paid $68,400 and incurred $30,000 in exploration expenditures.

The property is subject to a 2% NSR.  The Company can purchase 1% of the NSR from the vendors for $400,000 and has the right of first refusal on the remaining 1% NSR.

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(III)     West Timmins Nickel Project

Ownership

By agreement dated October 28, 2004 as amended September 27, 2006 and April 7, 2008, the Company had the option to earn up to a 100% interest in the West Timmins Nickel Project, consisting of 1682 claim units (27,235 ha), from Xstrata Nickel (formerly Falconbridge Inc.). 

Under the terms of the agreement PFN was required to spend $4 million over a five (5) year period in order to vest with a 100% interest in the Project.  Xstrata would retain a 2 % NSR and could, under certain circumstances, back-in and earn up to a 65% interest by completing a feasibility study or spending $20 million on a feasibility study, whichever occurred first.  Under the agreement PFN acted as Project Operator.

Minimum aggregate exploration expenditures of $4 million were to be completed by December 31, 2008.  This commitment was extended to December 31, 2009 to complete additional exploration programs as follows:

Location and Access

The property is located approximately 70 km west of the city of Timmins, Ontario and is within the townships of Belford, Griffin, Melrose, Montcalm, Nova, Strachan and Watson. The property is accessible by road travelling west from Timmins along Highway 101 for 5 km, then heading northwest for 56 km along the Mallette logging road.

Location of the West Timmins Project

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Exploration

The Company’s exploration activities on the West Timmins Nickel Project focused on nickel and associated metals. In addition to airborne geophysical surveys completed in late 2004, a detailed compilation of the historical work in the MFI was completed and has been used to help evaluate and prioritize conductors identified by the AeroTEM survey. In cooperation with Falconbridge, seven priority conductor anomalies have been identified based on geophysical responses, relation to the Montcalm deposit, geological settings and previous work over the conductors.

Follow up line cutting and EM surveys were initiated.  Drill testing of the stronger geophysical and geochemical targets was carried out in early 2006.  The most significant drill results were received in an area 5 km southwest of the Montcalm mine, where large zones of sulphide mineralization were intersected in an intrusive breccia.  Trace nickel and copper mineralization was intersected in parts of the zone.  PFN initiated a deep penetrating program of geophysical surveys to cover the extensive area between the successful drill holes and the mine area, and Xstrata agreed to continue the surveys on and over the mine on their property.  The surveys were laid out to look for sulphide mineral zones at depth associated with magnetic anomalies identified from the AeroTEM survey.

A diamond drill program was completed in 2007 with no significant intersections. The drill program targeted geophysical and geochemical anomalies identified in previous work programs. Numerous additional airborne EM (AeroTEM), Pulse borehole EM, and geochemical anomalies in the Montcalm Intrusive Complex remain to be drill tested.

In a continuing effort to evaluate the Montcalm Intrusion, a deep penetrating UTEM survey was completed in September 2008. Although some geophysical anomalies were identified, interpretations suggest that the anomalies are unlikely to reflect mineralization.

On May 5, 2009, the Company terminated the option agreement with Xstrata Nickel on the West Timmins Property.

(IV)     Raglan Hills (formerly South Renfrew)

Ownership

The Company staked 6 claims (1024 ha) in Raglan Township within the Raglan meta-gabbro mafic complex in June 2006.

Reconnaissance prospecting, sampling and geochemical soil programs was conducted over the property, as well as the historical showing areas.

In 2007 the Company entered into a 50/50 joint venture agreement with First Nickel to evaluate the claims as well as their adjoining claims (1728 hectares) as one property. 

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Location Map of Raglan Hills joint venture property

In 2008 an airborne magnetic and electromagnetic survey was completed on the Raglan Hills property. This was followed by mapping and prospecting in the vicinity of anomalies generated by the airborne survey.

Due to the downturn in commodity prices, PFN informed First Nickel that it would not be participating in the funding of a 2009 exploration program and as a result the Company’s participating interest has been decreased. As per the joint venture agreement with First Nickel, the Company’s participating interest was converted to a 1.5% NSR over the Raglan Hills property.

(V)       Coldwell Properties, Ontario

Ownership

In 2007, the Company acquired 91 mineral claims (20,254 ha) by staking in the Coldwell area near Marathon, Ontario. The claims covered parts of the Coldwell alkaline intrusive complex, which also hosts the Marathon PGM deposit.

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Location Map of Coldwell property near Marathon, Ontario

Airborne geophysical and lake bottom sediment surveys were completed in 2007. The goal of these surveys was to identify targets for follow-up ground evaluation in 2008. Prospecting and a soil geochemical survey were completed in 2008. This work did not identify any significant mineralization.

The Company allowed the Coldwell claims to lapse in July and August 2010.

(VI)     Goodchild Property, Ontario

During the year ended April 30, 2009, the Company acquired 28 mineral claims (6640 ha) by staking in the north east of the Coldwell Area near Marathon, Ontario. These claims were incorporated into the Coldwell project as described in the preceeding section.

As with the Coldwell Project, the Company allowed the Goodchild claims to lapse in February 2010.

(VII)    East Sudbury Property, Ontario

During the year ended April 30, 2009, the Company acquired 124 mineral claims (1,638 units – 26,208 hectares) by staking in the Sudbury area of Ontario.

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Location Map of East Sudbury property near Sudbury, Ontario

A limited program of soil sampling and prospecting was completed on the East Sudbury property in 2008. In September 2009, the Company sold certain of the East Sudbury claims to Trueclaim Exploration Inc. for a 1.5% NSR and 50,000 Trueclaim Exploration Inc. shares.

In September 2009 the property was reduced from 128 claims to 60 claims and from then through December 2009 an additional 56 claims were lapsed.  The Company allowed the balance of the claims remaining to lapse in August 2010.

(VIII)  Swayze Joint Venture, Ontario

In 2007 the Company acquired claims by staking in Kenogaming Township (in the Swayze Greenstone Belt), Ontario. On February 12, 2008, the Company entered into a three-year joint venture agreement with Benton Resources Corp. to evaluate the claims that both parties held in the Swayze Greenstone Belt.  It was proposed that the exploration budget over the three years would be $1,200,000 with the first year’s budget of $400,000.  Total holdings in the Swayze area include 3 properties totaling 8,544 hectares.

Any additional claims acquired in the Swayze Greenstone Belt would be included in the joint venture.  Each company would participate in working the properties as a 50:50 joint venture.  Expenditures and programs on the properties to be determined by an annual joint management committee meeting.

In 2008, and airborne survey was completed over claims in Tooms Township that form part of the Swayze joint venture property. In addition, prospecting and mapping were completed on the Tooms and Heenan Township properties. In late 2008, a small (500 m) drill program was completed on the Heenan Township property. This work did not identify significant mineralization.

On May 5, 2009 the joint venture was terminated.  The Company allowed the Swayze claims to lapse in January 2010 and has no further plans for this project.

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(IX)     North Duluth Property, Ontario

In 2007 the Company acquired 10 mineral claims (81 units – 1296 hectares) in the Crystal Lake Area south of Thunder Bay, Ontario and completed an airborne magnetic-electromagnetic survey over the property. The survey did not identify any significant targets for follow-up work and in February 2009, the property was reduced to 8 claims.  In February 2010, the remaining claims lapsed.

QUÉBEC, CANADA

(I)        Glitter Lake Property, Québec, Canada

Ownership

By an agreement dated August 15, 2003, April 30, 2006 and further amended on April 1, 2008, with CanAlaska, a company that previously had certain directors in common, the Company acquired a 50% interest in certain mineral claims known as the Glitter Lake property, located in the province of Québec.

The Glitter Lake property consists of 63 unpatented mining claims totalling 1,008 hectares. The claims are owned 100% by PFN, and carry expiry dates of 24 June 2011 (extensions have been applied for). Work requirements are $750 per claim.  The claims are situated along the trend of the gabbroic sill that hosts the Horden Lake Cu-Ni deposit and form two groups, one situated to the southwest of the Horden Lake property, the other to the northeast. 

As consideration, the Company, at its option, must issue common shares, make payments and incur exploration expenditures as follows:

        *    Extensions to these dates have been applied for and are pending.

Upon the Company having vested with a 50% interest by completing the aforementioned payments and obligations, the Company could elect within 45 days to increase its interest to 60% by completing a bankable feasibility study within 24 months.  In the event the Company did not complete a bankable feasibility study within two years, the Company agreed to make cash payments in the amount of $50,000 per annum for each year the feasibility study was not completed. Upon vesting with a 60% interest, the Company could elect within 90 days to earn a 70% interest in the property by placing the property into commercial production within 2 years from the date of this election. In the event that the bankable feasibility study indicated an IRR in excess of 15%, the Company agreed to make annual cash payments of $50,000 to CanAlaska for each year the project is not placed into commercial production. 

In the event that a major mining company elected to participate in the project before the Company vested with a 50% interest, the Company would issue common shares to the value of $100,000 to CanAlaska, within 15 days of the Company becoming vested, or pay such amount that would result in having the Company spent $1 million in exploration expenditures.

The property is subject to 1.5% NSR payable to a third party.  The Company and CanAlaska will share the NSR buyout privileges in proportion to their respective interests.

In 2007 PFN and CanAlaska agreed to an extension of the option.  A field program of sampling historical core stored on the property was also completed in 2007.

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On January 30, 2009, the Company and CanAlaska signed an amendment to the option agreement whereby CanAlaska assigned a 100% ownership of the Glitter Lake property to the Company, in consideration of meeting CanAlaska’s office lease obligations until the end of the lease term in November 2010. This equates to a one-time cash payment of $83,601 dollars.  CanAlaska retains a 0.05% NSR interest in the property along with the existing royalty agreement with the original prospectors of 1.5%. The original option agreement has thus been terminated.

The Glitter Lake Project is located in northeastern Quebec, approximately 135 km north –northeast of the town of Matagami. The property lies at the southwest end of a 40 km long, north east trending belt of metavolcanic and sedimentary rocks intruded by a gabbroic body.  The exploration target is PGM mineralization associated with copper-nickel sulphide mineralization. The Glitter claims surround, and extend along strike from the Horden Lake Copper-Nickel deposit, which hosts an indicated resource of 8.8Mt at 0.88% Cu and 0.21% Ni, and an inferred resource of 7.8Mt at 0.87% Cu and 0.25% Ni (Southampton Ventures Inc., Press Release, March 2, 2009).

The principal exploration target on the Glitter Lake Property is remobilized magmatic Cu-Ni sulphide mineralization along the contact of the metagabroic intrusion that hosts the Horden Lake deposit. Of particular interest is the potential for relatively high-grade Cu mineralization that could be used to augment the high grade, but relatively low tonnage portion (indicated resource of 2.4 Mt at 1.37% Cu, 0.25% Ni, and inferred resource of 2.0 Mt at 1.34% Cu, 0.34% Ni) of the Horden Lake deposit. 

On May 2, 2012, the Company entered into an agreement with El Condor Minerals Inc. ("El Condor")  to which El Condor has the option to earn a 100% interest in the Glitter Lake Property in the James Bay lowlands region of Quebec.

El Condor can earn a 100% interest in the Glitter Lake Property by paying an initial $50,000 (paid) and issuing 350,000 common shares to PFN (completed), and by making additional cash payments totaling $100,000 and issuing an additional 650,000 common shares of El Condor to the Company on or before the second anniversary of the Agreement, and by maintaining the Glitter Lake Claims in good standing for the 2-year term of the Agreement. A 2% net smelter return royalty has been granted to the Company, of which 1% may be purchased by El Condor for $1,000,000. The Glitter Lake Property is also subject to a pre-existing aggregate 2% royalty payable to various royalty holders.

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(II)       SOQUEM –Taureau & Chenneville Projects, Québec, Canada

On July 28, 2006 the Company signed a 50/50 Cooperation Agreement with SOQUEM Inc. ("SOQUEM") in order to conduct research on platinum properties in the southern portion of the Province of Québec, Canada, in a designated Area of Mutual Interest ("AMI"), with the objective of identifying viable properties for further exploration.  PFN and SOQUEM would pool staffing and funding resources, and share all technical data pertaining to properties located within the AMI, with each party having equal representation of two members each on a technical committee, responsible for setting programs, budget and schedule.  SOQUEM acted as Manager.  The first exploration program agreed upon between the parties was budgeted at $250,000 and was completed by the end of 2006.

In the event that a viable property was identified, the parties would contribute jointly to all staking and acquisition costs, or, if one party elected to do so independently, would do so at its own expense.  In that event, the other party was granted the right of first refusal to acquire a 50% interest in the property.  Exercise of this right would result in the creation of a new joint venture agreement between the parties for the newly acquired property.

The 2006 program’s assay results (1.17gpt Pd, 0.14gpt Pt, 0.29gpt Au, 1.62% Cu, and 0.35% Ni) from the Taureau evaluations justified staking a mafic intrusive and the flying of an airborne EM survey.  Several magnetic bodies with associated conductors were identified, and additional claims were acquired in these areas.

In 2007, work programs continued to evaluate mafic intrusives in the AMI.  The conductor trends identified from the airborne survey in the Chenneville area were staked (254 mineral claims – 15,200 hectares) and evaluated. The Chenneville Project was initiated to follow-up on the PGE-Cu-Ni mineralization located in 2006.  Additional follow-up ground work on the Taureau and Cheneville project areas was completed in 2009, culminating with a 500 m drill program on the Cheneville property.  No significant mineralization was identified during the course of the foregoing investigations.

Both parties agreed to abandon the entire Chenneville property since the fieldwork did not give the significant results expected and the Company and Soquem agreed to terminate the Taureau and Chenneville joint venture in August 2009.

(III)     Fiedmont Property, Val d’Or Québec

On December 16, 2008, the Company entered into an option agreement with Kinbauri whereby the Company could earn a 60% interest in 40 of Kinbauri’s 84 claims covering approximately 3,458 ha, known as the  Fiedmont PGM property, subject to a 2% NSR held by the original vendors. The vendor’s NSR is subject to a 1.0%, $900,000 buyback, to earn a 60% interest.

Under the terms of the Agreement, the Company would pay Kinbauri an aggregate amount of $98,000, issue 150,000 common shares to Kinbauri and expend $400,000 on exploration prior to November 30, 2010 to earn its interest. The Company’s first year commitment was mandatory and included payment to Kinbauri of $38,000 (paid), issuance of 50,000 shares (issued, valued at $4,500), and expenditures of $150,000 (incurred) on exploration prior to November 30, 2009.

The property is situated approximately 15 km northeast of Val d’Or, Québec and is road accessible.

The Company completed an initial drill program targeting potential extensions of the known mineralization in March, 2009; however, no significant assays were returned

The option agreement with Kinbauri was terminated on October 13, 2009.

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(IV)     Destiny Gold Project, Québec

Ownership

On August 14, 2009, the Company entered into an option agreement with Alto Ventures Ltd. (“Alto”) to earn a 60% interest in the Destiny Gold Project (formerly the Despinassy Project) consisting of 175 mining claims totalling 7260 ha.

Under the terms of the Option Agreement with Alto, PFN will pay Alto $200,000 ($100,000 paid), provide Alto with 250,000 common shares of PFN (75,000 common shares issued), and complete a total of $3,500,000 in exploration expenditures over a four year period to earn a 60% interest in the Destiny Gold property. Subsequent to vesting of its interest, PFN will form a joint venture with Alto to further develop the project. Certain claims comprising the property are subject to underlying net smelter return royalties ranging from 1% to 3.5%, with varying buy-back provisions.

 On August 8, 2011 PFN announced that, subject to regulatory and shareholder approvals, it has entered into a letter agreement (“LA”) with Next Gen Metals Inc. (“Next Gen”) (TSX.V:N) whereby Next Gen has been granted an option (“Option”) to acquire the Company’s 60% earn‐in option interest (“Option Interest”) in the Destiny Gold Project located in Abitibi‐Témiscamingue region of Québec, which Option Interest has been granted to the Company pursuant to an agreement with Alto Ventures Ltd. (“Alto”)(TSX.V:ATV).

On 27 June 2012, Next Gen elected to terminate its option with the Company on the Destiny Gold Project. Next Gen’s decision to relinquish the Destiny Project was made from an assessment of the 2012 exploration results not justifying any further capital outlay.

On 27 June 2012, the Company also terminated the Alto Option Agreement related to the Destiny Gold Project.  The Company decided not to pursue additional exploration on these properties and to concentrate efforts on advancing its 100% owned River Valley PGM Project.

Location and Access

The Destiny Gold Project is located approximately 75 km north of Val d’Or in the Abitibi-Témiscamingue region of Québec. The property is road accessible, and excellent mining infrastructure and support facilities are available in nearby Val d’Or. 

Geology

The Destiny Gold property is underlain by Archean metavolcanic and metasedimentary rocks of the Abitibi Greenstone Belt. A regional scale structure, the Despinassy shear zone, transects the property. High grade gold mineralization occurs in quartz veins and alteration zones associated with this structure. Mineralization has been identified in several locations along the Despinassy shear zone on the property over a strike distance of about 4 m.

Mineralization

The main area of mineralization, the DAC zone, occurs over a strike length of about 600 m. In this area, four to five identifiable intervals of quartz veining and shear-related alteration zones carry high-grade gold mineralization, with drill intersections ranging up to 178.5 g/t Au over a drill width of 1.0 m.

The DAC zone hosts a NI 43-101 compliant indicated resource of 166,863 tonnes grading 6.88 g/t Au (36,892 oz) and an inferred resource of 444,753 tonnes grading 4.46 g/t Au (63,839 oz) as calculated by W.A. Hubacheck Consultants Ltd. for Alto in “A Resource Estimate of the DAC Gold Deposit, Despinassy Twp., Val d’Or, Quebec,” dated January 9, 2007 (the “2007 Resource Estimate”), and incorporated into the Wardrop Report.  The DAC zone is open along strike and at depth. The occurrence of high-grade mineralization at the Darla and 20 and 21 zones to the east clearly indicates that the mineralizing system occurs across a significant portion of the property.

Exploration

The Phase 1 program was completed on December 22, 2009 and consisted of 5,600 m of drilling in 14 holes.  Results from the Phase I drilling program were very positive as they validated the deposit model and confirm continuity of gold mineralization between previous wide-spaced holes.  Each of the holes targeting the DAC deposit intersected gold within multiple zones of shearing, strong alteration, quartz veins containing variable amounts of sulphides. Significant gold values were obtained in 100% of the holes drilled including high grade quartz veins containing up to 44.39 g/t Au and wide mineralized shear zones including 21.0 m averaging 1.39 g/t Au and another high grade quartz veins containing up to 16.43 g/t Au over 0.5 m (0.48 oz/ton) and averaging 0.51 g/t and 49.5 m averaging 0.36 g/t Au.  Phase 1 confirmed the large size of the gold system at the DAC deposit.

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The Phase II drilling program began January 26, 2010 and was completed in March 2010. The results from the Phase I and Phase II programs are incorporated into the extensive data base available for the Destiny project for the next stage of work, which may include diamond drilling. Drilling at the DAC Deposit continued to intersect multiple gold zones with high grade values over significant widths. Table below illustrates significant drill intervals.

* Based on core angles and previous drilling, true widths are estimated at approximately 80 to 90% of the downhole lengths reported. Mineralized zones generally start at 0.1 g/t Au and assay averages may include minimal intervals of waste material. No top cuts of assays were used.

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The results from the first 14 holes confirmed the continuity of gold mineralization between holes drilled previously, some of which were spaced from 100m to 200m apart.

The 2010 exploration program was completed in December 2010. A high resolution airborne magnetic survey was conducted along with BHEM surveys that were designed to target massive sulphide mineralization.

Three drill holes were completed and each had a specific objective with respect to defining controls on the mineralization at the Destiny Gold Project. These are summarized as (1) to test selected BHEM conductors and assess the association of areas of sulphide mineralization with gold mineralization, and (2) to test for shallow gold mineralization to the south of the DAC deposit where the high resolution magnetic survey identified magnetic signatures similar to the DAC deposit.

Previous drilling revealed massive sulphide mineralized lenses locally adjacent to the gold mineralization. The companies interpreted these sulphide lenses as important to the gold mineralizing system and completed BHEM surveys in certain drill holes to trace the extent of the massive sulphide mineralization and to help guide drilling at depth.

The 2010 program also included the completion of the Wardrop Report, which incorporated over 7,600 m of additional drilling that was completed on the deposit subsequent to the 2007 Resource Estimate, for an updated NI43-101 compliant report with a resource estimate.

Indicated and Inferred resources have been determined for the DAC deposit. The deposit is made up of narrow high-grade gold-bearing quartz veins occurring within five parallel alteration zones. These alteration zones carry gold at lower grades than the quartz veins but are significantly wider. The Wardrop Report indicates that the additional drilling has expanded the DAC Deposit and significantly increased the contained ounces of gold.

At a cut-off grade of 0.5 g/t Au and using the Inverse Distance Squared (ID2) estimation method, the five gold zones contain an Indicated Resource of about 10.8 million tonnes with an average grade of 1.05 g/t Au (364,000 contained ounces). In addition, the Inferred Resource totals 8.3 Mt with an average grade of 0.92 g/t Au (247,000 contained ounces). Table 2 summarises the Resource Estimate at the 0.5 g/t cut-off.

A cut off grade of 0.5 g/t Au was selected to tabulate the total resources based on the results of similar gold projects located in Ontario and Quebec. In addition, the following parameters were considered; 4:1 stripping ratio, operating costs of $14.30/tonne at 10,000 tonnes per day, long term gold price of $US973/troy ounce, $US to $Cdn conversion of 1.02 and gold recovery of 94%. The resources block considers the mineralization to start at approximately 15 m below surface down to a depth of 400m for the deepest zone (Zone 5).

Mineral Resources are not Mineral Reserves and by definition do not demonstrate economic viability.

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On June 27, 2012, the Company elected to terminate its option agreement with Alto Ventures Ltd. (“Alto”) on the Destiny Gold Project in Val d’Or, Quebec.

Pacific North West Capital Corp. decided it would be in the best interest of the company to not pursue additional exploration on these properties and to concentrate efforts on advancing its 100% owned River Valley PGM project.

NORTHWEST TERRITORIES, CANADA

(I)        WINTER LAKE

In 2007, the Company staked two separate blocks of claims, totaling 33 mineral claims of approximately 34,070 ha in the MacKay Lake area of the Northwest Territories.  These claims cover geology similar to that where GGL Resources reported nickel values in a komatiitic environment. 

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No exploration work was completed on the property subsequent to staking, and the claims were allowed to lapse May 4, 2009 and reverted to the Crown.

SASKATCHEWAN, CANADA

(I)            Nickel Plats, Saskatchewan

By agreement dated 30 April 2007, the Company optioned the Nickel Plats property from Diamond Hunter Ltd. (“Hunter”) (Figure below). The property is located approximately 50 km north of La Ronge, Saskatchewan. The property covers a Ni-Cu occurrence (historic resource of 1.7 million tonnes grading 0.74% combined Ni-Cu) within a sulphide rich (pyrrhotite, chalcopyrite and pyrite) gabbro intrusion.

On 30 March 2009, the Company and Hunter signed an amendment to the terms agreement as follows:

Approximately $678,609 in expenditures have been accrued by the Nickel Plats Project, thereby fulfilling all exploration expenditure requirements under the terms of the amended Option Agreement.

In 2007, the Nickel Plats project was evaluated, and a compilation was begun to understand the setting of the mineralization as well as develop an approach to test the known mineralization and other targets that were developed from the work.  Five mineral claims (7,692 ha) were staked in the vicinity to expand to the property to include additional target areas. 

The Nickel Plats Project area is located at or near a terrain boundary underlain by Proterozoic rocks of the Hearne-Reindeer and Reindeer zones to the east of the Archean Hearne Craton and northwest of the Archean Sask Craton. The Reindeer zone forms the core of the Trans-Hudson Orogen and is subdivided into the Rottenstone and La Ronge domains. The Rottenstone domain consists of mainly metasedimentary rocks intruded by tonalite-trondhjemite plutons and small mafic- ultramafic intrusions. The grade of regional metamorphism ranges from lower amphibolite to upper amphibolite. The mafic-ultramafic intrusions are the foci of PFN’s exploration interest.

The property is underlain by gneissic to migmatitic metasedimentary rocks with or without metavolcanic rocks, intermediate to felsic intrusions and, locally, mafic-ultramafic plutons. The pluton at the Gochagar Lake Property is a multiphase intrusive complex consisting of a core of hornblendite and a margin of diorite that was intruded by gabbro. The gabbro is described as relatively fresh which contains xenoliths of the metasedimentary country rocks and hosts nickel-copper sulphide mineralization. The mineralized host rock types are norite, websterite, hartzburgite, hornblendite and even the surrounding metasedimentary rocks.

Exploration work carried out by PFN consists of drill core resampling for modern assays and an airborne electromagnetic (EM) survey. Only a single drill hole was resampled. The assay results confirm the nickel enriched (up to 0.60% Ni) composition of the mineralization relative to copper (up to 0.16% Cu), presence of cobalt (up to 0.022%) and minor amounts of PGM (up to 0.3 gpt Pt+Pd).

In 2008, a total of 2284 line km of VTEM was flown by Geotech over PFN’s Nickel Plats Project area. Mr. Laurie Reed (a renowned geophysical consultant) completed an interpretation of the VTEM survey for PFN. The survey did detect the Gochagar A-Zone deposit. Several similar responses were identified in the vicinity of that zone and elsewhere on the Nickel Plats properties. These targets remain to be geologically proofed and drill tested.

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A 2,284 line km helicopter-borne VTEM (Versatile Time Domain Electromagnetic) geophysical survey was completed by Geotech Ltd. over the Nickel Plats property in 2008, with a large number of anomalies identified, and limited re-sampling of historic drill core on the property was also completed. 

The Nickel Plats adjunct property is subject to a 2.0% NSR. The Company has the right to purchase a 1.0% NSR for $750,000.

Pacific North West Capital Corp. decided it would be in the best interest of the Company to not pursue additional exploration on these properties and to concentrate efforts on advancing its 100% owned River Valley PGM project.

The claims of the PFNs Nickel Plats Project (in grey)

BRITISH COLUMBIA, CANADA

(I)        Rock & Roll Property - Au-Ag-polymetallic project

Ownership

On July 28, 2009, the Company obtained an option from Misty Creek Ventures Ltd. (Misty Creek Ventures Ltd. was dissolved in January 2010 and its interest was transferred to Equity Exploration Consultants Ltd.), First Fiscal Enterprises Ltd. and Pamicon Developments Ltd. (collectively, the “Vendors”) on the Rock & Roll Property.  Under the terms of the Agreement, the Company can earn a 100% interest in the property over a four-year period by completing $2,000,000 ($594,046 incurred) in exploration expenditures, paying the Vendors $130,000 and providing the Vendors with a total of 600,000 (100,000 shares issued) of the Company’s common shares.  The Vendors retain a 2% NSR, of which 1% can be purchased for $3,000,000. The property is also subject to an underlying NSR of 3% and an underlying  Net Profits Interest Royalty ("NPI") of 15%, both of which are payable to Prime Equities International Corporation, and both of which are purchasable by the Forrest Syndicate and/or heirs and assignees in their entirety for $1,500,000 each.

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On 19 June 2012, the Company terminated the option agreement with the Vendors related to the Property.

Location and Access

The Rock & Roll Property is located in the Liard Mining District approximately 9 km west of the Bronson airstrip and 37 km from the Eskay Creek Mine Road in northern British Columbia.

Geology and Mineralization

The Rock & Roll Property hosts precious metals rich in volcanogenic massive sulphide (VMS) mineralization in a volcano-sedimentary host rock package of Triassic age. As such, the mineralization shows similarities to the gold and silver rich mineralization of Barrick Gold’s past-producing Eskay Creek mine.  Known mineralization on the Rock & Roll Property occurs in multiple stacked sulphide lenses in two zones, the Black Dog and SRV zones, over a strike length of approximately 950 m.  A total of approximately 14,000 m of core drilling in 110 drill holes was completed on the property from 1991 to 1997. Only six drill holes tested the host stratigraphy outside of the known mineralization, but at least 5km of strike length of the prospective lithologies is present on the property. There is the potential for additional mineralization along strike and at depth, as historic drilling tested the known mineralization down to depths of only about 160 m.

Exploration

The 2009 exploration program included a 350 line km, AeroTem3, helicopter-borne magnetic/electromagnetic survey conducted by Aeroquest Limited and a drilling program consisting of a total of 540 m of core drilling completed in five holes. The first four holes were designed to test gaps in the historic drilling on the Black Dog Zone in order to establish the degree of continuity of the mineralization and to confirm the historic geological model. Each of the infill drill holes encountered the target mineralization, confirming the continuity of the sulphide lenses and the validity of previous geological interpretations. The table below illustrates selected assay results from this drill program. (Au and Ag in g/t. Cu, Pb and Zn in percent (%).

*Interval represents apparent thickness not true thickness

The final drill hole of this program tested a strong electromagnetic anomaly that was thought to represent the westward continuation of the Black Dog Zone. Drilling at this location failed to return any significant assays.

Further investigations are required to test for a westward extension of the main zones of mineralization.

The 2009 work program on the property was also designed to provide an initial evaluation of the validity of historic assay data. A total of twenty-one samples from five different historic drill holes were obtained for comparison with the original assays. In most cases the samples were taken from the same core interval as the original samples.

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Overall historic assay results have been confirmed, and the Company can now embark on a systematic re-sampling of historic core to provide a statistical comparison of the historic assay data with modern data. Commencement of the 2010 Rock and Roll exploration program was announced on September 27th 2010. This program primarily focused on continuation of re-sampling previous drill core, coupled by geological mapping/prospecting that investigated airborne geophysical survey conductors and geological and geochemical targets. The fieldwork was supported by further compilation of data from the 1990-97 programs and the incorporation of new geological interpretations formulating in conjunction with members of the British Columbia Geological Survey.

The Rock & Roll Report, commissioned by Alto and PFN, and filed on June 1, 2011 on the Company’s Form 6-K, included a new NI 43-101 compliant mineral resource estimate for the Black Dog Deposit. The resource estimate incorporated the mineralized zones of the historic drill core and the 540 m (1772 ft) of the five diamond drill holes that were completed by PFN in 2009/2010. Through this work, PFN significantly increased the resources contained within the Black dog deposit over the previous resource estimate, completed prior to the implementation of the NI 43-101 standards of disclosure.

The NI43-101 compliant mineral resource estimate in the “indicated” category consists of 2,155,679 tonnes grading 0.68 g/t Au (47,040 contained oz of Au), and 82.7 g/t Ag (5,734,445 contained oz of Ag) at a gold-equivalent cut-off grade of 0.5 g/t. The deposit also contains 0.22% Cu (10,500,833 lbs Cu), 0.22% Pb (10,399,960 lbs Pb), and 0.94% Zn (44,522,995 lbs Zn) or 3.11 g/t gold equivalent (AuEq) for an additional 215,239 oz of Au Eq at the 0.5 g/t AuEq cut-off. The AuEq grade is based on $1000/oz Au, $15.80/oz Ag, $2.92/lb Cu, $0.86/lb Pb and $0.86/lb Zn. Tables below give the mineral resource estimate for the Black Dog deposit at varying cut-off grades.

The Black Dog massive sulphide deposit is part of a larger area that includes the SRV Zone hosting precious metal-rich volcanogenic massive sulphide (VMS) mineralization. These occurrences display similarities to other precious metal-rich deposits such as Eskay Creek (50 km to the east-southeast), Greens Creek, and other deposits of the Canadian Cordillera. The mineralization on the Rock &Roll property is hosted by graphitic argillite to siltstone. The Black Dog and SRV zones are dominated by massive pyrrhotite with blebs and lenses of chalcopyrite and sphalerite. Massive pyrite-sphalerite forms finely laminated lenses locally, with minor pyrrhotite, galena and chalcopyrite.

Indicated Mineral Resources, consistent with CIM definitions required by NI43-101, are reported at various cut-off grades in Table 1 (for Au and Ag) and Table 2 (for Cu, Pb, Zn and gold equivalent values). Inverse distances squared interpolation restricted to mineralized domains were used to estimate gold (grams/tonne Au), silver (grams/tonne Ag), copper (% Cu), lead (% Pb), and zinc (% Zn) grades into the block models. Gold, silver, copper, lead and zinc content were combined into a gold equivalent value (using to the prices given above) for resource reporting.

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Gold and Silver Indicated Mineral Resource Estimate at various gold-equivalent cut-off grades. Metallurgical recoveries and net smelter returns are assumed to be 100%

Copper, Lead, Zinc and gold equivalent Indicated Mineral Resource Estimate at various gold-equivalent cut-off grades

On June 19, 2012, the Company elected to terminate its option agreements with Pamicon Developments Ltd. on the Rock & Roll Polymetallic Project, British Columbia.

The Company decided it would be in its best interest to not pursue additional exploration on these properties and to concentrate efforts on advancing its 100% owned River Valley PGM project.

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ALASKA, USA

(I)        Union Bay Platinum Property

The project is located 32 km west of Ketchikan, Alaska.  The exploration target is an enriched platinum bearing zone within or peripheral to a dunite core.

Location Map of Union Bay property, Alaska

By agreement dated October 1, 2002 and amended April 2, 2003 and February 4, 2004, the Company could acquire, from Freegold, a company that previously had certain directors and officers in common, an option to earn up to a 70% interest in the property.

In order to earn its 50% interest, the Company, purchased a private placement of $165,000 (2002), made cash payments, and issued common shares and incurred exploration expenditures as follows:

Following vesting with a 50% interest on July 1, 2006, the Company had the right to elect within 45 days to increase its interest to 60% by completing a feasibility study within 12 months of vesting with 50%.  This election was not made.

As a term of the agreement the Company, upon vesting with 50%, issued 253,586 common shares at market value of $100,000 to Freegold.  In a previous year, 134,538 common shares were issued, the value of which was accounted in the previous year.

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By Memorandum of Agreement dated May 4, 2007, Freegold and the Company confirmed their 50/50 interest in the property, with the Company as Project Operator.

In October 2012, upon agreement between Freegold Ventures Limited and Pacific North West Capital Corp., it was agreed to cancel following claims:

No programs were carried out during the past year and Freegold and the Company are seeking a joint venture partner to further develop this project.

The Company decided it would be in its best interest to not pursue additional exploration on these properties and to concentrate efforts on advancing its 100% owned River Valley PGM project.

(II)       Kane Property

On June 6, 2007, the Company entered into an option agreement with Stillwater whereby Stillwater could earn 50% of the first selected property by spending US$3.5 million and US$4.0 million on each subsequent selected property by December 31, 2011.  In March 2008, Stillwater elected not to continue with exploration on the property in order to evaluate new ground in southeast Alaska.

In October 2012, the Company allowed the Kane Property claims to lapse.

The Company decided it would be in its best interest to not pursue additional exploration on these properties and to concentrate efforts on advancing its 100% owned River Valley PGM project.

(III)     Tonsina Property

The Tonsina property, presently defined, consists of 46 State of Alaska mining claims, known as the “Marc” claims 1-46 (ADL Nos. 610060 – 610105; which were staked in June 2006.  These claims comprise a contiguous group of State of Alaska ¼ section claims covering approximately 29.78 sq. kilometers (744.62 hectares, or 7,360 acres), herein referred to as the “Tonsina property”.  The claims are owned 100% by the Company.

The property is located in the Valdez quadrangle in southeast Alaska on state select land, located approximately 6 km south of the village of Tonsina and 110 km north of Valdez.  The property covers prospective PGM mineralization within the Tonsina ultramafic intrusive complex.   Access is relatively good with bush roads 6 km north to the Richardson Highway which connects Anchorage to Fairbanks.  Helicopters are still required to reach the higher elevations.

The Company decided it would be in its best interest to not pursue additional exploration on these properties and to concentrate efforts on advancing its 100% owned River Valley PGM project.

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The 2007 exploration program identified significant PGM anomalies associated with a sulphide and chromite enriched layer in the Tonsina Ultramafic Complex. An induced polarization survey designed to test the extent of the mineralization was completed in the summer of 2008, and was followed by a ground magnetic survey and surface channel sampling. The results suggest that the zone of sulphide mineralization is continuous over a 300 m strike length.  Future work will focus on determining the total strike extent of this zone, and identifying the best locations for drill testing of the mineralization.

The Company decided it would be in its best interest to not pursue additional exploration on these properties and to concentrate efforts on advancing its 100% owned River Valley PGM project.

  (IV)     Nixon Fork Project, Alaska

By Letter Agreement (the “Agreement”) dated December 9, 2008 between the Company and St. Andrew Goldfields Ltd. (“SAG”), the Company was granted an option, exercisable until February 15, 2009, to acquire a 100% interest in SAG’s wholly-owned subsidiary Mystery Creek Resources Inc. (“MCR”).  MCR’s assets include the Nixon Fork property, located 56 km northeast of McGrath, Alaska. 

The Company paid US$100,000 upon signing the agreement dated 9 December 2008. The Company exercised the option by agreeing to pay a further US$400,000 of which US$100,000 was paid February 12, 2009, and the balance was paid in three equal installments on May 1, 2009, July 1, 2009 and September 1, 2009.

In June 2009, the Company granted Fire River Gold Corp. (“FAU”) an option to acquire all of the outstanding shares of MCR. FAU paid PFN US$50,000 on signing of the agreement. The sale of MCR to FAU was approved by PFN shareholders in August 2009. The shareholders of FAU approved the purchase of MCR in September 2009.  FAU exercised the option by making further payments totaling US$450,000 and issuing a total of US$2.5 million in FAU shares at a deemed price of $0.45 per share for a total of 6,415,000 shares to the Company.

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FAU issued to the Company 1,000,000 share purchase warrants entitling the Company to purchase 1,000,000 shares at an exercise price of $0.50 for a period of twenty-four months from the date of closing. FAU reimbursed all expenses incurred by the Company from May 1, 2009 until the finalization of this transaction for a total CDN$773,766.

(I)        Burkina Faso, Africa

On January 18, 2011, the Company entered into an agreement with Somitra to acquire 100% interest in the properties of Kangara, Kalempo and Lhorosso. The Company can earn a 100% interest in the properties under the following terms of the agreements:

• US$75,000 on signing of the agreement (paid);
• US$30,000 on six months following the signing of the agreement (paid);
• US$105,000 on the first anniversary of the signing of the agreement (paid);
• US$120,000 on the second anniversary of the signing of the agreement;
• US$150,000 on the third anniversary of the signing of the agreement; and
• After completion of transferring the claims, the Company is required to issue 450,000 common shares of the Company to Somitra or pay the sum of US$135,000.

PFN’s Burkina Faso gold Projects lie within the Birimian Greenstone Belt of West Africa, one of the most prolific gold producing regions of the world. The Birimian Greenstone Belt consists of Lower Proterozoic age volcanic and sedimentary units intruded and surrounded by related plutonic rocks and has a long history of gold mining with industrial history beginning in Ghana at the end of the 19 ^th century.

On May 24, 2012, the Company entered into an agreement to provide Roxgold Inc. (“ROG”) an option to earn a 100% interest in company’s all three gold exploration permits in Burkina Faso. In order to exercise the option, ROG shall make the cash payments and issue shares as set forth below:

Upon completion of the option, the Company will retain 1% NSR.  1% NSR can be purchased from the Company for $500,000.

In February, 2013 Roxgold Inc. elected to terminate its option agreement related to the Burkina Faso gold projects, subsequent to Roxgold’s termination, Pacific North West Capital also elected terminate its agreement with Somitra.

Each property is subject to a 1.0% NSR with the buyout price of US$1,000,000 for any deposit over 1 million ounces and US$500,000 for any deposit under 1 million ounces.  A joint venture partner is being sought to further explore the project.

 “Property, Plants and Equipment” sections of this report have been reviewed and approved for technical content by William Stone Ph.D. P.Geo, President & COO of PFN and a Qualified Person under the provisions of NI 43-101.

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