Ahtna Minerals Company, a Subsidiary of Ahtna, Incorporated

MINERAL EXPLORATION OPPORTUNITIES

TABLE OF CONTENTS

1. Executive Summary
2. Introduction
3. Ahtna Corporate Profile
4. Land Status
5. Location, Physiography, Access
6. Exploration and Mining History
7. Regional Geology
8. Metallic Mineral Deposits and Mineral Potential

8.1 Deposits
8.2 Potential

8.2.1 Lichen Greenstone Belt
8.2.2 Slana
8.2.3 Mentasta
8.2.4 Southern Copper River
8.2.5 Old Kennicott Trend
8.2.6 Tonsina Ultramafic Trend
8.2.7 Cantwell

9. Summary
10. Agreement Terms
11. Conclusion
12. References

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1.0 EXECUTIVE SUMMARY

Ahtna Incorporated is one of Alaska's twelve Native Corporations that were granted land entitlements under the Alaska Native Claims Settlement Act (ANCSA) in 1971. The company owns 1,528,000 acres and upon completion of the land selection process will own 1,777,000 acres. Ahtna seeks to develop mineral resources on its lands and actively encourages mining companies to explore, develop and mine minerals in the region.

Ahtna's lands were selected to a large degree on mineral resource potential as perceived from public data and proprietary data generated from Ahtna-sponsored exploration programs. The incredibly rich Kennicott copper deposits attest to the ability of the region to host world-class mines. Mineral terranes permissive and prospective for bulk-minable-tonnage and high-grade vein gold deposits; volcanogenic, syngenetic, sediment-hosted polymetallic deposits; carbonate-hosted replacement and epigenetic deposits; and a range of skarn and porphyry deposits are present.

Exploration and mine development on Ahtna lands in Alaska has the following advantages:

• strong mineral resource potential
• secure land tenure
• enormous land tracts covering entire mineral belts,
• low degree of prior exploration,
• best infrastructure development and accessibility of any Native land holdings in the state, and
• pro-mining, pro-resource, pro-development corporate management.

The following report provides a glimpse at Ahtna's tremendous mineral resource potential, and briefly describes geographic, economic and political considerations. The company believes that its lands should be highly rated on the global scale of exploration opportunities. Companies interested in exploring and developing mines on Ahtna land are encouraged to learn more. The company will make all private and public data pertaining to Ahtna lands available to interested parties and can assist with site inspection and evaluation. Ahtna will work with mining companies to make their projects successful.

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2.0 INTRODUCTION

The following report outlines the regional geological setting of Ahtna Incorporated (Ahtna) lands in the context of mineral resource potential, and provides an overview of prospective mineral terranes and documented mineral deposits and occurrences in the region. Economic and political considerations are also reviewed. The report is intended as an introduction to the mineral potential of the Ahtna region and the company that holds title to much of the land in the area. The attached map depicts all major geographic and land status features, as well as mineral deposits, occurrences and terranes referred to in the report.

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3.0 AHTNA CORPORATE PROFILE

Ahtna is one of twelve Alaska Native Regional Corporations established by Congress under the terms of the Alaska Native Claims Settlement Act (ANCSA) in 1971. There are approximately 1100 shareholders, most of whom reside in the Copper River region. The company derives revenue from subsidiary corporations active in the fields of pipeline maintenance, construction, catering, janitorial services, security services and telecommunications.

The regional corporation holds title to enormous tracts of land that were selected to a large degree for their potential to host mineral deposits. Ahtna seeks to develop this tremendous resource asset. In 1978 a subsidiary, Ahtna Minerals Company, Inc. (AMC) was formed to manage and promote corporate growth through development of the parent company's mineral resources. AMC wishes to lease mineral lands to mining companies for exploration, development and mining. The main objectives are to:

• increase the parent corporation's profitability through mining-related revenues,
• provide shareholder employment opportunities in exploration, development and mining operations and related service industries, and
• provide contract opportunities for qualified Ahtna subsidiaries and their joint venture businesses.

Ahtna believes that a strong economic base provides shareholders with the ability to preserve their Native culture. Responsible development of Ahtna's mineral resources is seen as a means to this end.

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4.0 LAND STATUS

The regional corporation and affiliated village corporations own outright the surface and subsurface estate to 1,528,000 acres of land. Upon completion of the land selection process Ahtna will own 1,777,000 acres. Conveyance of the balance of 249,000 acres will be taken from a pool of approximately 1,500,000 acres of selected lands.

Approximately one-half of the company's selected and conveyed lands are situated in the northwest portion of the Ahtna region. Permission to access and explore conveyed lands is granted through the regional corporation and associated village corporations. Ahtna-selected lands in this area are administered by the Bureau of Land Management (BLM).

The remainder of Ahtna's conveyed and selected lands occur as in-holdings near the western boundary of the Wrangell-St Elias National Park and Preserve. These lands, while owned or selected by Ahtna, are under the jurisdiction of the National Park Service (NPS). Permitting of exploration activity is done by this agency but is handled by Ahtna on behalf of mining companies. The fact that some of Ahtna's lands are situated within the boundaries of a national park should not be viewed as a deterrent to developers of mineral resources. The company has the right of access, guaranteed by an act of Congress, to any mineral deposits located on Ahtna-owned lands within the park boundaries. Because of the sensitive nature of the setting, greater care and sensitivity to environmental issues must be taken, and a more arduous permitting process is to be expected.

Please refer to the attached Ahtna Regional Land Status Map for details.

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5.0 Location, Physiography, Access

The Ahtna region covers an enormous expanse of land spanning an area from the village of Cantwell southwestward to the Canadian border in south-central Alaska. Much of the region is inaccessible due to steep mountainous terrain and extensive alpine glaciers.

In the eastern half of the Ahtna Region, the Wrangell Mountains form the heart of the Wrangell St. Elias National Park. About 45% of Ahtna’s selections and conveyed lands form an arc on either side of the park boundary, following the Copper River from Nabesna in the north to McCarthy/Kennicott in the south. The most mineral-prospective tracts are situated near Nabesna and McCarthy, and are reasonably near the road system.

In the western half of the Ahtna Region, two other mountainous sections are bisected east to west by the Copper Basin plateau, a sedimentary basin of low relief. The Alaska Range and the Mentasta Mountains bound the north side of the Copper Basin. The known mineral occurrences in these ranges are within reasonable distance of the Alaska highway grid, and those near Cantwell have access to the Alaska Railroad and the Anchorage-Fairbanks power intertie. On the south side of the Copper Basin, the Chugach and St. Elias Mountains occupy a position along the southern margin of the region. The eastern portion of this sub-region is within the Wrangell-St. Elias National Park. Ahtna owns no land in this area. The western portion of this area contains a number of selections along the northern front of the Chugach Mountains.

Most of the Ahtna selected and conveyed lands cover moderate to gentle terrain. The lands are in the most accessible portion of the state adjacent to major transportation corridors. The Richardson, Glenn and Denali highways provide access to port facilities and service industries at major population centers. Ahtna maintains its headquarters in Anchorage, and also Glennallen which lies 160 miles by road from Anchorage. Fairbanks lies 230 road-miles to the north. The Port of Valdez is 85 miles south of Glennallen along the Richardson Highway. The Alaska Railway passes through the northwestern portion of the region near the town of Cantwell and leads to the ports of Anchorage and Seward. The Anchorage-Fairbanks Intertie high voltage electrical power grid also passes by Cantwell.

The Ahtna region is covered by portions of the Gulkana, Valdez, McCarthy, Nabesna, Bering Glacier, Anchorage, Talkeetna Mountains, Healy, Mount Hayes and Tanacross quadrangle maps published by the United Sates Geological Survey (USGS).

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6.0 EXPLORATION AND MINING HISTORY

1884 - 1939: The first mineral prospecting occurred in the area in 1884. The region experienced a large influx of prospectors and miners in the late 1800's as a result of the Klondike Gold Rush. A number of placer gold deposits were discovered and exploited. The Kennicott (stratiform copper-silver) and Nabesna (gold-bearing skarn) mines were discovered during this period as were the Elliot Creek, Berg Creek, Clear Creek and Copper Creek prospects. Most mining activity in the region had ceased by the onset of World War II.

1950 - 1970: Sporadic exploration for porphyry and breccia-type copper-molybdenum deposits was carried out.

1971 - 1977: ANCSA was passed in 1971 and Ahtna began the process of selecting lands. No mineral exploration of note was carried out during this period.

1977 - 1979: A three-year reconnaissance exploration program was undertaken by three companies in joint venture with Ahtna. The joint venture was coordinated by WGM Inc., an Anchorage-based consulting firm. This company also acted as project manager and carried out the multi-year program with a total budget of approximately $2 million. The program consisted primarily of stream-sediment sampling, prospecting, reconnaissance mapping and rock sampling. Exploration was directed toward porphyry copper-molybdenum, uranium and volcanogenic massive sulfide environments. The program was successful in identifying a number of mineralized terranes, and aided Ahtna in the process of land selection.

Alaska Mineral Resource Assessment Program (AMRAP) studies were carried out by the USGS in the Nabesna, McCarthy and Valdez quadrangles. These are integrated studies that resulted in the publication of geochemical, mineral occurrence and geological data.

1980 - present: Cominco investigated the Slana District in the vicinity of the Ahtell Pluton in the early 1992, and performed reconnaissance in the Mentasta Mountains in 1992-94. Homestake Mining Company acquired claims in the Slana area in 1997 adjacent to Ahtna land holdings. A program consisting of reconnaissance mapping and sampling was carried out. The target in both cases was gold-copper mineralization associated with dioritic intrusions.

Noranda Exploration, Inc. carried out reconnaissance mapping and geochemical sampling in the Alphabet Hills area in 1981. The target was massive sulfides and precious metals associated with a Paleozoic volcanic belt.

Geneva Pacific Mining and Conoco carried out exploration programs at the Nelson Mountain, Berg-McDougall and Clear Creek - Porcupine Creek areas in the early 1980's.

In 1997, the BLM began a multi-year mineral assessment of Ahtna lands that lie within Wrangell-St. Elias National Park and Preserve. The study was carried out at the request of the NPS. The NPS wishes to provide comprehensive minerals information to Ahtna so that the company may relinquish over-selections within the park boundaries.

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7.0 Regional Geology

The Ahtna region is underlain by a collage of Paleozoic and Mesozoic volcanic arc rocks, comagmatic hypabyssal intrusions, and marine volcanoclastic and sedimentary rocks, Mesozoic flysch-basin deposits and younger late Mesozoic and Cenozoic sedimentary, volcanic and plutonic rocks.

The Wrangellia Terrane underlies much of the Ahtna region. This terrane is an extensive package of rocks extending from Alaska to the southern tip of British Columbia, and it includes the Taku-Skolai Arc. These arc rocks formed outboard of the continental margin and accreted to ancestral North America in the late Cretaceous. The Denali Fault bounds Wrangellia to the north and east, abutting it with the Devonian Yukon-Tanana Terrane. A diverse array of lithological units comprise the terrane. Compressional tectonics have affected Wrangellia with increasing intensity northward to the Denali Fault, which is a major crustal suture and tectono-stratigraphic boundary that extends from southeast Alaska to the Bering Sea. Wrangellia has undergone greenschist facies metamorphism, with local amphibolite facies near terrane-bounding faults. Numerous Mesozoic subduction-related granitic plutons intrude the arc sequence. Widespread volcanic deposits of Tertiary and Quaternary age uncomformably overlie the older rocks. Surficial glacial deposits are present throughout the area and locally attain significant thickness.

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8.0 Metallic Mineral Deposits and Mineral Potential

8.1 Deposits

As a result of the diverse underlying geology, the Ahtna region is host to a large array of metallic mineral deposits, and indeed some unique deposit types. However, metallic lode deposits in the Ahtna region can be roughly divided into two main types:

1. Those Paleozoic and Mesozoic deposits formed by syngenetic, diagenetic and early epigenetic processes related to arc-forming events at and beneath the sea floor in outboard terranes (volcanogenic massive sulfide (VMS), SedEx, magmatic and replacement deposits); and
   
   
2. Those formed by late Cretaceous post and syn-accretionary subduction-related magmatic events (variety of skarns, porphyry and vein deposits).

The BLM has documented mineral occurrences situated on Ahtna lands that lie within Wrangell-St. Elias National Park and Preserve. A total of 55 occurrences situated on or near Ahtna selections were included in the assessment. Of the 55 occurrences, nine are historically-producing dormant mines, 27 are development prospects, and the remainder are exploration prospects of varying importance. Eight of the occurrences are placer gold deposits. The preliminary results of the ongoing investigation are documented in BLM-Alaska Open File Report 71 (Meyer and Shepard, 1998). Follow-up results are documented in BLM-Alaska Open File Report 73 (Meyer and VandeWeg, 1999). Each occurrence is described in detail in the reports. Ahtna will supply copies of the reports on request.

Numerous mineral occurrences lying outside the Wrangell-St. Elias Park boundaries are also present, and many occur on Ahtna lands. Information on these prospects can be obtained from Ahtna, the USGS or the Alaska Department of Natural Resources.

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8.2 Potential

While some very significant deposits have been discovered, the region has seen very little exploration. The reconnaissance program carried out by WGM in the late 1970's is the most comprehensive completed to date. The program barely began the mineral assessment process, however it was successful in the identification of six main mineral belts. A synopsis of the WGM descriptions follows:

8.2.1 Lichen Greenstone Belt:
A volcanic belt with potential for discovery of massive sulfide deposits is indicated. Stream-sediment reconnaissance surveys identified an area in excess of 40 miles long in which anomalous copper results were obtained. Numerous polymetallic massive sulfide occurrences are noted throughout the belt.

8.2.2 Slana:
Intrusive-related bulk-minable and epithermal gold deposit potential is indicated. Numerous strong gold anomalies from stream-sediment samples were detected in three different areas draining diorite and quartz-diorite intrusive complexes. Broad alteration zones are reported.

8.2.3 Mentasta:
Intrusive-related bulk-minable and epithermal gold deposits, polymetallic vein deposits, VMS, porphyry copper-molybdenum and gold skarn deposit potential is indicated. Numerous multi-element stream sediment anomalies are reported.

8.2.4 Southern Copper River:
Vein, skarn, VMS and sediment-hosted (SedEx?) massive sulfide deposit potential is indicated. Numerous sulfide showings at Nelson Mountain carry very strong zinc values. Gold-copper-silver skarn mineralization is documented at the Berg-McDougall occurrence.

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8.2.5 Old Kennicott Trend:
Kennicott-type copper mineralization in Chitistone Limestone and underlying Nikolai Flood Basalts occurs on Ahtna lands. There is potential for discovery of more carbonate-replacement copper deposits, as well as potential gold-copper skarns and porphyry copper-molybdenum deposits.

8.2.6 Tonsina Ultramafic Trend:
Mafic and ultramafic rocks of the Tonsina Complex are exposed in four low-lying hils to the east of the Richardson Highway: Scarp Mountain, Sheep Hill, Dust Mountain, and Bernard Mountain. Anecdotal evidence of PGM occurrence is found in local names including Chrome Creek and Platinum Creek. Reconnaissance geologic mapping and sampling affirm the existence of chrome, platinum, and palladium in this trend.

8.2.7 Cantwell:
The WGM surveys detected anomalous values from stream sediments in the following metals: copper, molybdenum, lead, tungsten, tin and uranium. The anomalous values were obtained from streams draining felsic intrusions and fractured-controlled sulfide mineralization was discovered during follow-up surveys. Recently, a major mining company sampled one of the rare outcrops along the highway and obtained highly anomalous gold assays associated with altered intrusives. This area is close to the Golden Zone, a gold-copper breccia-pipe deposit. Ahtna lands in the area hold potential for this type of deposit.

8.2.8 Eagle Trend and the North Side of Denali Fault:
Reconnaissance by WGM identified several base metal anomalies in the northeast corner of the Ahtna Region, on the north side of the Denali Fault.

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In an area northwest of the Ahtna region recent exploration by mining companies has resulted in the discovery of nickel-copper-platinum-palladium mineralization. The showings occur in mafic-ultramafic complexes that served as sub-volcanic feeders to the Nikolai Flood Basalts. A Noril'sk analogue may be indicated. Wrangellian Flood Basalts occur on Ahtna lands as well. Potential for this deposit type may exist.

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9.0 SUMMARY

Based on the BLM mineral occurrence documentation, Alaska Department of Natural Resources mineral occurrence information, the WGM investigations and a review of mineral terrane information in general it is apparent that potential for the following metal-deposit / commodity-types exists:

• bulk-minable-tonnage and high-grade epigenetic gold deposits,
• placer gold,
• precious-metal-enriched polymetallic base-metal volcanogenic massive sulfide deposits,
• SedEx zinc-lead-silver deposits,
• carbonate-hosted replacement and epigenetic base-metal deposits,
• sandstone-hosted copper deposits,
• magmatic nickel-copper-platinum-palladium deposits, and
• skarns and porphyry deposits.

Of the above-listed deposit types, the high-unit-value base and precious-metal deposits and the bulk-minable-tonnage gold deposits comprise the most attractive exploration targets in the prevailing mining economic climate and commodity-demand regime. Gold deposits were not a target sought in the WGM surveys. The presence of Cretaceous intrusions and historic placer gold production indicates that potential for bulk-minable-tonnage gold and epithermal vein deposits exists. Virtually no work has been done to evaluate this potential.

Ahtna lands are underlain by geological sequences that have produced enormous mineral wealth elsewhere in the Cordillera. On this basis alone, Ahtna lands clearly have strong mineral potential. The presence of numerous deposits and occurrences, some of extreme value such as Kennicott, underlines the importance of the region. The fact that there have been relatively few mineral deposits discovered in comparison to the southern part of the Cordillera is simply a function of the degree of exploration that has been carried out. Ahtna lands have outstanding potential for discovery of ore bodies.
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10.0 agreement Terms

Ahtna will grant mining companies the exclusive right to explore, develop and mine on specific land tracts that have demonstrated mineral potential under the terms of an Exploration and Option to Lease Agreement.

Ahtna does not currently have any active mineral agreements. The company would therefore consider favorably an arrangement whereby a mining company or a consortium would be provided the exclusive right to explore in a reconnaissance fashion all Ahtna selected and conveyed lands, with the option to select specific tracts of land for lease and detailed exploration or development.

Ahtna expects to see the following components to any Exploration and Option to Lease Agreement:

· signing bonus,
· scholarship fund contributions,
· escalating work commitment,
· production royalty,
· advance minimum royalty payments,
· shareholder hire and contract preference,
· option to participate at feasibility stage,
· vocational training, and
· electronic and printed copies of all data generated.

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11.0 Conclusion

Upon completion of the selection process Ahtna will own 1,777,000 acres of land covering ground with excellent mineral potential. There are indications of deposits of the following affinity:

• bulk-minable-tonnage and high-grade vein gold deposits,
• placer gold,
• precious-metal-enriched polymetallic base-metal volcanogenic massive sulfide deposits,
• SedEx zinc-lead-silver deposits,
• carbonate-hosted replacement and epigenetic deposits,
• sediment-hosted copper deposits,
• Magmatic copper-nickel-platinum-palladium deposits, and
• skarns and porphyry deposits.

The property owned by the company has received only cursory mineral exploration efforts. Much more reconnaissance work is required to delineate established mineral terranes, and to identify as-yet unrecognized terranes. Nevertheless, strong targets that can quickly be moved to an intermediate or advanced exploration stage exist. Modern exploration methods, economic and deposit-model concepts have not been applied in the region.

Most of Ahtna's mineral lands are situated close to major transportation corridors and infrastructure. Target economics are therefore excellent by Alaska standards.

Ahtna wants to develop mines on its lands and welcomes mining companies to explore them. Responsible explorers, developers and miners operating with sensitivity to Native heritage, culture, environment and traditional ties to the land will receive this native group's full support in every aspect of the business.

For all of these reasons - technical, economic and political - Ahtna lands are an attractive exploration target.

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References:

Meyer, M.P. and Shepherd, A.D. (1998): Mineral Assessment of Ahtna, Inc. Selections in the Wrangell-St. Elias National Park and Preserve, Alaska; 1997 Preliminary Report; Open File Report 71, Bureau of Land Management, Alaska State Office.

Meyer, M.P. and VandeWeg, D.A. (1999): Mineral Assessment of Ahtna, Inc. Selections in the Wrangell-St. Elias National Park and Preserve, Alaska; 1998 Preliminary Report; Open File Report 73, Bureau of Land Management, Alaska State Office.

Plafker, G. and Berg, C. (1994): The Geology of Alaska, The Geological Society of America publication, The Geology of North America, Vol. G-1

WGM Inc. (1979-1981): Exploration Program, Ahtna Region.

Foley, J.Y., Mardock, C.L., and Dahlin, D.C. (1986): Platinum Group Elements in the Tonsina Ultramafic Complex, Southern Alaska; Process Minerology VII: Applications to Mineral Beneficiation Technology and Mineral Exploration; Proceedings of a symposium on Process Mineralogy held during the Metallurgical Society Annual Meeting, Denver, Colorado, February 23-27, 1987.

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