In the simplest terms, a Borehole Pulse Electro-Magnetic ("BPEM") Time Domain Geophysical Survey involves lowering various types of geophysical probes down drillholes, laying out one or more large surface transmitter loops or configurations thereof, as well as using a generator, a transmitter, synchronizing crystal clocks and a receiver; the probes are used to detect the Primary EM Field generated by the loop during the 'on time', as well as any potential Secondary EM Fields generated by conductive bodies/horizons at depth during the 'off time'. The 'on time' is the period during which the power to the loop is turned on and the Primary EM Field is measured, the 'off time' is the period during which the power to the loop is turned off and the Secondary EM Field(s) are measured, both on and off times occur in milliseconds. It is imperative to make note of which way the transmitter loop wires are hooked into the transmitter in order to determine Primary EM Field direction, which ultimately affects the interpretation of data.

Various geophysical probes (Z and XY) are used to detect potential Secondary EM Fields and measure the decay time of the EM field generated by conductive bodies/horizons that may lie nearby the drillhole, or that have been intersected by the drillhole. The Z probe is the first of the probes to be slowly lowered down the drillhole. A digital receiver on surface is connected to the probe via a water proof conductive cable; the Z probe consists of a number of planar oriented coils used to detect EM fields. The probe is stopped at various depths at which point readings are recorded, with measurements taken of both the Primary EM Field during loop on time, and the Secondary EM Field when the loop is turned off. The sample rate readings, repeat of readings and reading depths are determined by various factors such as:

• Geology/lithology
• Structural interpretation prior to the survey
• Conductors or conductive horizons intersected by the drillhole
• Conductors expected to have been intersected, but were not
• Operator experience and knowledge
• Noise factors
• Client preferences

Consequently the operator may take readings in increments of 1 metre to 10's of metres, depending on how much detail is preferred or required. The EM response measured by the Z probe may provide various results, depending on location of the surface loop, the power generated by the loop, whether or not conductive bodies or horizons were intersected by the drillhole, or missed by the drillhole, as well as potential interference of conductive bodies of little interest, such as graphite horizons potentially shielding conductors lying below the graphitic horizons. Hence loop placement is of primary importance, as is the understanding of structure and the type of conductive body that the program has been designed for. The strength of the data recorded depends on the decay rate of the conductor(s); if the conductor is weak then the decay rate of the Secondary EM Field will be relatively quick, that is the EM field collapses relatively quickly. Therefore, weak conductor readings may only be recorded for a few channels (maybe channel 1-4). However, if the conductor is relatively strong, the decay of the Secondary EM Field will be slower and data may be recorded for 10+ channels, a very strong conductor may record data for 30+ channels. Consequently the Z probe may detect:

• Strictly an Inhole (+ve) response if a conductive body/horizon was intersected by the drillhole.
• An Offhole (-ve) response if a conductive body/horizon lies purely away from the drillhole.
• A combination of an Inhole/Offhole response, whereby the drillhole may have intersected the conductive body/horizon, but with the more highly conductive portion of the body lying further away from the drillhole.
• Various combinations of the above.

Following the Z probe survey and retrieval of the probe, the XY probe is then slowly lowered down the drillhole, with similar readings taken as those taken during the Z survey. However the XY probe consists of a set of oriented coils at right angles to one another and vertically oriented within the XY probe. Again this probe is used to detect potential Secondary EM Fields, but may also provide a direction to the conductive body/horizon. Examples of some conductive body/horizon orientations are as follows:

• The XY probe may determine that the main conductive portion of the body was intersected as is.
• The XY probe may determine that the main conductive portion of the body is lying directly above the drillhole and/or possibly to the left or right of the drillhole.
• The XY probe may determine that the main conductive portion of the body is lying directly below the drillhole and/or possibly to the left or right of the drillhole.

Conductive horizons may consist of near solid to solid sulphides (pyrite, pyrrhotite, chalcopyrite, galena with +/- sphalerite), net-texture or stringer sulphides, graphitic horizons, or clay rich fault/shear horizons. All of these types of conductors may or may not contain gold or other precious minerals and economic elements.

Please see the diagram labeled 'Typical Borehole Survey Layout' to assist with the understanding of the downhole (borehole) survey. The diagram displays two scenarios, one with a drillhole intersecting a conductor and a second drillhole which did not intersect the conductor. The diagram was supplied by Alan Vowles, Senior Exploration Geophysicist with HudBay Minerals Inc.

Compiled by: Jim Sparling, COO, Skyline Gold Corporation
Date: October 11, 2011