Hoidas Lake

Hoidas Lake is a strategic Rare Earth and Phosphate project located in Northern Saskatchewan. A recent (2014) NI 43:101 report outlines a 2.56 Mt resource with 2.431 TREO%.

Commodities: REE's and phosphate
Location: NW Saskatchewan, Canada
Ownership: Option to acquire 60%
Project Area: 12,522 Ha
Deposit Type: Vein hosted apatite
Resource: 2.56MT of 2.431 TREO%
Technical Report

The Hoidas Lake Rare Earth Project is one of North America's most significant primary Rare Earth Element (REE) properties currently being developed. Hoidas Lake has one of the highest proportions of neodymium (Nd) present in any known rare earth deposit. This makes it strategically important to the permanent magnet industry as demand for permanent magnets used in "green" applications, like electric motors in hybrid vehicles and permanent magnet generators in wind turbines, is the driving force behind the rare earth industry. Star Minerals Group Ltd. ("Star") has signed a joint venture agreement whereby Star has the right to acquire a 60-percent controlling interest in the Hoidas Lake by paying $25,000 and issuing 5,000,000 shares.

Once a prefeasibility study has been completed (at Star’s sole expense) and the Bankable Feasibility study has been provided (at Star’s sole expense) all costs moving forward will be shared by each member’s ownership prorata. Failure to participate will result in that member being diluted down by 10% for every $500,000 being spent on their behalf until they are diluted down to 10%, which is where they will remain.

The Hoidas Lake Rare Earth Project is located within Saskatchewan's Northern Mining District, approximately 55km northeast of Uranium City, Saskatchewan. The property consists of 14 mineral dispositions totaling 12,522 hectares. It is accessible all year round by float or ski-equipped aircraft from Stony Rapids, 130km to the southeast or Uranium City. There is all weather road access to Stony Rapids, and scheduled airlines flights to both Stony Rapids and Uranium City from Saskatoon, Saskatchewan.

Hoidas Lake mineralization is found in a series of steeply dipping vein sets, which cut through Archean granites and gneisses of the Northern Rae Geological Province, within the Western Craton of the Canadian Shield. The rare earth mineralization at Hoidas Lake is predominantly hosted within the minerals apatite, allanite and bastnaesite, with minor mineralization in chevkinite and monazite. The vein sets host more than 30 known rare earth occurrences within and parallel to the Nisikkatch-Hoidas Fault over a 10-km strike-length, a splay off the major Black Bay Fault, which runs southwest to Uranium City. The focus of most of the exploration effort has been the JAK Zone, located at the northern end of the mineralized fault system.

Originally discovered in 1950 as a direct result of post-WWII uranium exploration, the Hoidas Lake property saw sporadic exploration until 1999 when GWMG optioned the property and began systematic exploration work.

Initial trenching on the JAK Zone, carried out by GWMG in 1999, confirmed the presence of significant rare earth element mineralization. Since 2001 the Company has completed five drill programs on the Hoidas Lake property for a total of 184 diamond drill holes recovering 21,700 metres of drill core. On the main JAK Zone, 120 diamond drill holes have been completed, totaling 15,223 metres. This drilling is the basis for the resource estimate.

The current resource estimate by Barr Engineering Company ("Barr"), in the NI43-101 Technical Report Update to Resource Estimate on the Hoidas Lake Property, Saskatchewan Canadadated January 31, 2014, incorporates reported drilling results from four separate drilling programs from 2001 through to 2008 for a total of 120 diamond core holes.

This Barr resource estimate was carried out for yttrium plus the 15 rare earth elements of interest by two methods; inverse distance and ordinary kriging. The inverse distance interpolation results are used as verification of the ordinary kriging results. The results of this resource estimate are tabulated below, using a 1.5% Total Rare Earth Element ("TREE") weight percentage cut off:

Category Tonnes TREE Wt% TREO Wt%
Measured 963,808 2.142 2.568
Indicated 1,597,027 1.958 2.349
Total 2,560,835 2.027 2.431
Inferred 286,596 1.784 2.139

*TREO calculated by the Company's Qualified Person.

Metallurgical work on the Hoidas Lake mineralization has been ongoing since 2001. A preliminary flowsheet has now been designed that produces a mixed rare earth carbonate and a nitrogen phosphorous fertilizer. Overall recovery of the rare earth elements is 70% and recovery of the phosphate is 93%.

Golder Associates, of Saskatoon, are the environmental managers on the project and have substantially completed the environmental baseline fieldwork.

The Company has engaged Barr to complete a PEA report on the Hoidas Lake Project. It is expected that the PEA will be delivered in 2016.