The Gold Bug area is underlain by a sequence of folded and faulted upper Triassic andesitic volcanic and clastic sedimentary rock units of the Stuhini Group. The sequences of clastic layered rocks consist of volcanic wackes, andesitic flows, and argillite interbeds. Monotis fossils found within this assemblage on the north slope of Snippaker Peak give an age of Upper Triassic. The stratified rocks are correlative with upper members of the Stuhini Group.

Intrusive bodies include an orthoclase porphyry plug at the junction of Bronson Creek and the Iskut River and a large quartz monzonite to granodiorite intrusion along the east margin of the property.

The volcaniclastic is described as an andesitic agglomerate, comprised of unreworked volcanic fragments up to 2 centimetres in length and subrounded to subangular feldspar porphyry clasts. The matrix of this porphyry consists of an aphanitic mass of andesitic to basaltic composition which exhibits pervasive chlorite alteration.

The agglomerate has undergone weak regional greenschist facies metamorphism and is altered by pervasive carbonate, chlorite and to a lesser extent, epidote. The agglomerate also hosts 1 to 3 per cent disseminated magnetite.

Mineralization on the Waratah property may be classified into three categories: native gold-pyrite veins in a monzonite intrusion (refer to Golden Arrow, 104B 296); several copper-gold veins (refer to Waratah 6, 104B 204); and copper-lead-zinc-silver-gold veins both occurring within andesitic agglomerate.

The Gold Bug zone is located on the western side of the Waratah property and is reported to strike over 60 metres. Mineralization in the zone is comprised of semi-massive pyrite, magnetite and chalco- pyrite within quartz-chlorite veins that are characterized by the presence of galena and sphalerite. This veining is similar to the copper-gold veins on the Waratah 6 claim. Alteration consists of a narrow envelope which consists of pervasive chlorite-carbonate altera- tion penetrated by a network of carbonate-quartz-pyrite veinlets adjacent to the vein walls.

The lead and zinc mineralization is accompanied by lower gold values, generally ranging between 0.3 to 3.4 grams per tonne gold, and higher silver values.

An 0.85 metre sample from Trench 22, taken across a massive sulphide zone (pyrite-magnetite-chalcopyrite) in a quartz-chlorite vein called the Upper Gold Bug vein assayed 10.4 grams per tonne gold, 20.4 grams per tonne silver, 0.4 per cent copper, 0.03 per cent lead and 0.86 per cent zinc. A grab sample taken from a 20 by 40 centimetre pod within this vein assayed 20.1 grams per tonne gold, 16.5 grams per tonne silver, 0.4 per cent copper, 0.03 per cent lead and 0.39 per cent zinc (Assessment Report 16904). Samples from trenches on the Gold Bug zone taken in 1988 ranged from 7.37 grams per tonne gold over 0.3 metre to 29.7 grams per tonne gold over 0.77 metre (Vancouver Stockwatch, Sept. 2, 1988).

The Boot zone, located about 400 metres west of the Gold Bug vein, hosts gold mineralization that appears to be structurally controlled within a faulted and intensely altered sedimentary unit (refer to Boot 104B 297).

Work History

Skyline Explorations Ltd first staked the Bug Lake property area in 1982. In 1983, a Skyline-Placer Development joint venture contracted an airborne electromagnetic and magnetic survey over the claim area. Skyline then optioned the property to Gulf International Minerals Ltd; they carried out field programs, which included line cutting, trenching, soil sampling and prospecting. Additional line cutting, trenching, and a Pulse-EM survey were completed during 1985. This option was subsequently dropped.

In 1986, Hector Resources Inc. acquired the Jazz claims, which adjoins the present day Bug Lake property to the south, through an option agreement with Skyline Exploration Ltd. In 1987, Hector carried out a program of geological mapping, prospecting, as well as geochemical and geophysical surveys. The program led to trenching and a 15-hole, 610 metre, diamond drill program to evaluate the Golden Spray Zone, which is southeast of the Waratah 7 claim.

In 1987 and 1988, Skyline optioned the Waratah Property to Tungco Resources Corp., which is approximately coincident with the current Bug Lake property. Tungco conducted line cutting, geochemical, and geophysical surveys, prospecting, trenching and diamond drilling. This work included 33 km of line cutting, 45 kilometres of magnetic and VLF-EM surveys and the excavation of 40 trenches. A total of 1,025 soil, 7 heavy mineral, 4 silt, and 509 rock samples were collected and analyzed. Seventeen gold occurrences were discovered during this program, most of which were investigated by trenching and/or drilling. An Aerodat airborne VLF-EM and magnetic survey was flown over the property during the spring of 1988. Drilling in 1988 is reported to consist of 807 metres in 8 holes on the Gold Bug showing (104B 295) though no documentation is published.

In 1990, Keewatin Engineering was commissioned to explore the previous Waratah 7 claim, which is now covered by the extreme eastern end of the Bug 3 claim. This work was done for Big M Resources Ltd. as part of an option agreement with Royal Bay Gold Corp., formerly Tungco Resources Corp., and the pre-cursor to Featherstone Resources and Newcastle Minerals. The work included geological, geochemical and prospecting surveys, as well as a trenching and diamond drilling program totalling 540 metres in 7 drill holes over the Cooper Zone, which is 2.4 kilometres southeast of the River showing.

During 1996, Royal Bay Gold Corp. conducted work over portions of the Waratah 7 claim. The purpose was to evaluate the Cooper Zone and the area southeast of the Cooper Zone to the Golden Spray zone. This work consisted of 5 kilometres of line-cutting, geological mapping, rock sampling including 66 samples, and 100 line meters of trenching, and 4.5 line-kilometres of VLF-EM and magnetometer surveys. A compilation of the previous trenching and drilling is presented below in Table 5-2

During September 2002 Newcastle commissioned geochemical rock and soil and prospecting surveys on the Bug 1, 2, and 3 claims. In the order of 47 rock samples and 125 soil samples were taken mostly over known historical showings. Areas that were concentrated on in the 2002 sampling program were, from west to east, Boot Hill and Flare zone, Ridge grid, No.9 showing, Gold Bug area, and the Western to Center baseline areas.

During 2008 Newcastle completed geochemical soil (33 samples) and rock (37 samples) surveys on the Bug 3 and Waratah 7 claims on and adjacent to known defined vein mineralization. Seventeen different showings with significant gold values occur on the Bug Lake property. This included sampling and prospectng on the following showings and areas: Western Ridge, Eastern Ridge No. 9 and Western, Centre and Eastern baseline.

During 2009 through 2011, Skyline Gold Corp. completed programs of prospecting, geochemical (rock and soil) sampling, trenching, airborne and ground geophysical surveys and 23 diamond drill holes, totalling 5676 metres, on the area as the Iskut property.