Vanguard

The Shebandowan Belt covers 100 km, equivalent to the whole Noranda to Val d'Or belt (Thomson Bouquet trend), or the whole of the Red Lake Camp, or the whole Timmins Camp including all the area from Joburke east through Timmins to Matheson, or all the land from Kirkland Lake to Timmins. The Shebandowan Belt is part of the Wawa subprovince which means it is the west extension of the Abitibi Belt west of the Kapuskasing Structure, and therefore Shebandowan extends southwest into the Wisconsin Belt.

Canadian Golden Dragon Resources Ltd. ("Dragon") has been exploring for Cu-Zn-Ag-Au in the Shebandowan greenstone belt since 2002 and has assembled 460 claims covering an 18 km long section of favourable rhyolite-basalt volcanic stratigraphy, that hosts two known Cu-Zn-Ag-Au VMS deposits, known as Vanguard East and West ( 100,000 and 200,000 tonnes respectively). The property is situated 110 km west of Thunder Bay in the Shebandowan greenstone Belt. Highway 11 to Atikokan and two power lines traverse the length of the property. The main CNR rail line also crosses the north boundary of the claims. With excellent infrastructure, exploration and development of the property will be less expensive. Numerous clear cut areas have exposed new outcrops thereby opening a new insight on the geology and giving access to parts of the property that were never explored in detail by previous workers.

Over 13 km of an exhalite (chert) marker has been identified on the property that links the VMS (volcanogenic massive sulphide) deposits with the North Coldstream mine (a former producer of 101 million lbs. of copper, 440,000 ounces of silver and 27,000 ounces of gold.). The key horizon is repeated by folding and extends 30 km to the south west where Maple Minerals Corp. and East West Resource Corp. have attempted to cover most of it, until you get to the Freewest Sungold Property where a new discovery of high grade zinc and copper was announced. There are numerous Cu-Au showings along this trend line and a very large Cu-Zn lake sediment anomaly on the Clay Lake claim group.

This type of marker horizon occurs in major producing Camps such as Mattagami (tuffite marker) and Noranda (Amulet marker). The Shebandowan greenstone belt is an extension of the Abitibi Belt that contains the Thompson-Bousquet, Noranda, Normetal, Joutel, Mattagami and Timmins basemetal camps. It is a well known fact that VMS camps such as Noranda, Mattagami, Thomson-Bouquet, Kamiskotia-Kidd Creek and Flin Flon, all contain numerous small massive sulphide bodies 500,000 - 6,000,000 tonne deposits as well as larger 12 - 15 million tonne bodies and often very large deposits of 50 - 200 million tonnes. This means you have clusters of smaller deposits surrounding the larger ore bodies. The small deposits can be found in pods 100 m in length but even the large deposits can be located in a 150 m length on surface, such as the Horne at Noranda (60 million tons of 2% Cu and 5 grams gold) or the Normetal mine (11 million tons of 2.12% Cu, 5.12% Zn, 1.5 oz. Ag, and 0.02 oz. Ag) that had a surface expression of only 50 - 60 m.

A large rhyolite dome as well as mafic-felsic contacts are covered by the Vanguard Property which give repeated sections that could contain basemetal deposits. A large sodium depletion area occurs which is associated with the footwall of VMS deposits. In all cases a large zone of sodium depletion occurs beneath the deposits marking the area where hot metal bearing fluids passed stripping the sodium from the rocks. Zones of magnesium rich chlorite were also formed below the sulphide deposits. Chlorite has been detected at surface around certain of the new anomalies on the western part of the Vanguard Property in the rhyolite pile. These two types of alteration are indicators of the presence of a VMS system. At Mattagami and Noranda, all of the Cu-Zn-Au-Ag deposits formed at the junction of the chert exhalite horizon and the chlorite-sodium depletion alteration zone.

When the volcanic rocks are folded and deformed by shearing, the alteration can become separated from the main body of sulphides, displaced to the side. The chert horizon.can be folded and faulted into segments however the original deposit can remain intact and can be stretched along a fold axis to form plunging lenses. Intrusions such as gabbro bodies can sometimes form a cap to dam fluids thereby preventing them from reaching the sea floor, thus forming sulphide bodies beneath the gabbro. Younger gabbro intrusions can tear away part of a massive sulphide leaving the main body within the volcanics. A gabbro body at Vanguard may have played these roles as a gabbro intrusion separates the 100,000 tonne East Zone from the 200,000 tonne West Zone.

Helicopter time domain EM surveys were flown in February 2003 which outlined 11 new conductors not previously detected by older surveys including the West Vanguard Cu-Zn deposit. A 450 km time domain helicopter-borne EM survey was flown over the entire claim group in February 2003, with lines at 50 m spacing over the West and East Vanguard deposits, and at 100 m intervals for a 10 km long section of the property and at 150 m intervals on the western area covering the rhyolite pile. Of the eleven new conductors identified by this survey, that had not been located by conventional EM surveys in the past, one of these was a large one over the West Vanguard zone. This new EM system called Dreamcatcher has a wide spectrum of detection capability as well as the ability to penetrate to depths in excess of 300 m. If old fixed wing aircraft-borne EM surveys could penetrate 75m, then the question arises, "One can understand how the new survey might pick up the deeper copper sulphide (chalcopyrite) zones and pyrite (massive sulphide) phases which are conductive, but the West Vanguard zone comes right to surface, why wasn’t it picked up by the old surveys?" The low conductivity of the Vanguard zone is due to carbonate and silica alteration that insulates the sulphides and renders them poor conductors. Sphalerite (zinc sulphide) is not a conductor and therefore also insulates. The shape of the zones also made them difficult to detect since they are plunging lenses and had individual short strike lengths. This led to the erroneous conclusion that the two zones were isolated small high grade pods at surface. Drilling on the East Vanguard Zone detailed below has also dispelled the belief that the mineralization does not continue to depth.

Dragon was the first company to fly the Dreamcatcher EM system in the Shebandowan Area and has successfully reflown a portion of the property with a more powerful upgraded version (26 m coil) in February 2005 that confirmed and refined certain conductors that are about to be drilled. Although we mentioned earlier that overall structure probably extends all the way southwest through the East West and Maple ground to the recent Freewest discovery (see landmap Northern Miner), we know from the magnetic data and two years of mapping the geology in the vicinity of each conductor with geochemical testing, that the favourable horizon along which the Cu-Zn-Ag-Au zones occur, is 13 - 15 km long extending from our mineralized zones west to the Coldstream Mine of which Dragon has 10 km., and an additional 6.5 km to the east along Three Mile Bay.

Two diamond drill holes were completed in November 2002 to test the upper part of the Vanguard East Zone and determine the relationship between the gold and copper values to see if there was a similarity to the Coldstream mine. The plunge was also being determined as well as the sulphide metal zoning. A typical pattern of an undeformed VMS system was intersected in the first hole VE02-1 where a zinc rich upper phase overlies a copper-gold rich phase lower stringer zone (see table of Assays), whereas in the second hole the zinc and copper phases were combined which is more typical of numerous other VMS deposits in the Canadian Shield.

Hole VE04-05 represents a further step-out on the same body of mineralization two years later.

An extensive examination of the geology along the trend of EM conductors in the Long Lake area, as well as the rhyolite pile and the western extension of the Vanguard zone has been completed. A sulphide showing called Valvasori near the Coldstream patent boundary was examined and the sericite schists on the north side of the Coldstream were followed. The important highlights of this effort was the realization that a large felsic rhyolite breccia occurred southwest of Long Lake on the regional Vanguard horizon trend, suggesting a more focussed effort be made in this area in search for a larger VMS deposit. Numerous undrilled EM conductors occur here. In addition the presence of rhyolite breccia suggests that a vent may occur nearby, which is a favourable setting for larger VMS deposits. The theory behind a larger VMS deposit on the western part of the property is discussed in the accompanying report by Dr. J. Franklin, a respected expert on VMS deposits, and an advisor to the Company.

Separate distinct gold mineralization on the property takes a number of forms and is in a similar setting to that found in Red Lake and Timmins, Ontario, as well as a setting unique to the Coldstream Mine, and the Horne mine in Noranda-Rouyn, Quebec. Thus it may be present as a credit with the base metal as noted above or may exist as the primary metal in unrelated geological structures. At present the company is focusing on the base metal part of this facinating property.

In May 0f 2006 Golden Dragon granted to Alto Ventures Ltd. the right to purchase a 100% interest in 16 claim units located in the western portion of our Vanguard Property covering 256 hectares. The property is located immediately east of Alto’s Coldstream Gold Property, site of the historic North Coldstream Copper-Silver-Gold Mine.

The option to purchase these claims includes compensation of a cash payment of $90,000 and 400,000 common shares of Alto payable over three years, and a 1% Net Smelter Return Royalty.

The property to be acquired is just east of and adjacent to Alto’s main East Coldstream drill target and has potential for mineralization on a structural trend extending onto Dragon’s property. An historical resource estimate of 7.6 million tonnes averaging 2.0 g/t Au was identified at East Coldstream by Newhawk Gold Mines Ltd., containing approximately 485,000 ounces of gold. This estimate is based on 6,138 metres of core drilling but was not calculated or classified under the current specifications outlined in National Instrument 43-101 (as reported by Alto in NR April 26, 2006). Further to the southwest the Moss Lake deposit, with an historical resource of 60 million tonnes grading 1.1 grams gold per tonne (as reported by Moss Lake Gold Mines Ltd.), is in a similar geological environment as Alto’s East Coldstream gold deposit.

In January of 2007 a letter of intent was executed for a joint venture agreement with Everett Resources Ltd. ("Everett"), with an effective date of December 10, 2006, on the remaining 421 claim units of the Vanguard-Shebandowan Property. Previously in 2006 a program was designed to test a sericite schist alteration zone, along a trend approximately 2km. northeast of the North Coldstream Mine, outside of the area acquire by Alto. Disseminated sulphides were intersected, including a 0.8m zone at a 32m depth below surface, assaying 3.4% zinc, 0.12% copper and 1.25g gold and a second 1m zone at 35m below surface, assaying 0.41% copper and 20.1g silver. Dragon initiated a large geophysical IP program in the area of this third discovery to delineate the extent of mineralization, which is now funded by Everett. The proximity to the old North Coldstream Mine makes us hopeful for a large deposit on the western part of the property.

In the short to medium term Dragon and Everett plan to complete the geophysical program and drill both the area of latest discovery as well as continue to expand the Vanguard East Zone.

The JV agreement calls on Everett to spend $3 million in exploration before January 20 2011, to earn a 50% interest in the Vanguard. Property. In addition starting January 20, 2008 Everett must pay a total of $150,000 in option payments. With TSX:V approval Everett will issue 200,000 common shares of its stock to Dragon in tranches of 50,000. Everett has the right to further earn an extra 10% by taking the property to bankable feasibility, and the right to earn an additional 10% by taking the property to production. Dragon will be the operator of the program for the first two years for which it will receive a fee of 15% of all third party contracts. The JV agreement is subject to the approval of the TSX:V Exchange and any other regulatory bodies.