McFauld's Lake Area-Hawk/MacDonald - McNugget JV Property, Ontario

PROPERTY LOCATION AND OWNERSHIP:
The Hawk-McNugget Property comprises six contiguous mining claims (for 96 claim units – approximately 3,840 acres) in the Thunder Bay Mining Division, near the western edge of the James Bay Lowlands, Ontario. The Property is enclosed within the larger MacDonald Mines Exploration Ltd. McNugget claim block. MacDonald Mines is the operator of the Hawk-McNugget JV (MacDonald (63.25%) and Hawk. (36.75%), and all exploration work is conducted by MacDonald contractors.

PROPERTY DESCRIPTION AND HISTORY:
In 2004, MacDonald conducted a helicopter-borne time-domain electromagnetic survey at 75 and 50 metre line spacing over the Big Mac and McNugget properties. This provided comprehensive and detailed geophysical target information. The survey was subsequently interpreted for potential nickel/copper/zinc deposits given the VMS discovery by Noront in the McFauld's Lake area, and the nickel-copper-PGM showings, MacDonald Mines retained Scott Hogg, President of Scott Hogg & Associates Ltd. to review and reinterpret the existing MacDonald airborne survey flown in 2004.

The preliminary re-interpretation of the McNugget airborne survey indicated that there are a number of potential nickel targets on the property.

PREVIOUS WORK COMPLETED:
Drilling by MacDonald in 2005 led to the discovery of VMS mineralization on the McNugget claim block immediately adjacent to the Hawk-McNugget Property, as well as a large differentiated mafic-ultramafic complex with magnetite layering and minor sulphide. Hawk then authorized MacDonald to drill a hole (MN-5) to test an anomaly in this mafic-ultramafic complex: the best assay from the hole was 0.252% Cu over 0.75m in a magnetite layer. Immediately adjacent to the Hawk-McNugget Property, MacDonald intersected VMS mineralization in drill hole MN-3 of 1.16% Cu over 5.9m, which included a 1.5m section of 2.10% Cu and 1.3% Zn while testing a VTEM conductor. The stratigraphic horizon containing this intersection strikes onto Hawk-McNugget ground. Other VTEM anomalies remain to be drill tested on the Hawk-McNugget Property.

CURRENT WORK PROGRAM:
Line cutting of control grids has been completed as well as ground geophysical surveys including Max-Min EM, magnetics and selected areas of gravity to confirm the location and quality of airborne targets. The ground survey work was contracted to Exsics Exploration (Timmins) with helicopter support being provided by Expedition Helicopters (Cochrane).

MacDonald has completed 12 diamond drill holes in its Phase 1 drill program, of which 5 - totaling approximately 1,089 meters - were drilled on the Hawk-McNugget JV property. Cartwright Drilling of Goose Bay NewFoundland is the drilling contractor on the project. Bill Nielsen, P. Geo. (Director – MacDonald Mines) oversees the overall exploration program on behalf of MacDonald Mines and its JV partners.

Field exploration is managed by Randy Salo, P. Geo. in consultation with Bruce Durham, P. Geo. of Temex Resources and Hadyn Butler, P. Geo. and Director of MacDonald Mines.

Geovector Management Inc. of Ottawa, on behalf of MacDonald Mines, examined a detailed Geotech airborne magnetic survey over the Property, and by using Keating correlation-coefficient analysis has undertaken an empirical search for kimberlites. These procedures also identified two kimberlite-like targets on MacDonald’s adjacent McNugget ground and one on the Hawk-McNugget Property.

The Drill Targets:
The original McNugget Property, which includes the Hawk Uranium joint venture claims, contains, as previously outlined by Hadyn Butler, 20km of coincident magnetic and/or electromagnetic targets in an identical basal contact (stratigraphic) position to Noront's Eagle One discovery. The number of targets has yet to be quantified for this program but will constitute a significant portion of the total program because of the very favourable geology.

Kirk McKinnon, President & CEO, MacDonald Mines, commenting, said, “The original Noront discovery required, from a market perspective, additional mineralized discoveries in order to verify a new mining camp of significance. Noront’s recent “Eagle Two” discovery, which is over two kilometres from the original discovery, meets this requirement. The second Noront discovery changes the dynamics for MacDonald Mines as the Company can now analyze its properties from a new geological perspective. Our drill program analysis going forward will now focus on the exploration for nickel-bearing ore deposits relative to Voisey’s Bay or Sudbury, where most of the significant mineralized discoveries in both those camps occurred at depth.”