The Surprise Creek property is located about 32 kilometers northeast of Stewart, British Columbia in the Skeena Mining Division. It consists of 57 claims covering almost 24,500 hectares located between Todd and Surprise creeks. The property is currently 100% owned by Pinnacle.

The property lies within a belt of Jurassic mostly volcanic rocks extending from the Kitsault area to Stikine River. This belt hosts numerous precious and base metal deposits, including the producing Eskay Creek and former Snip, Granduc and Premier Mines.

The Surprise Creek claim group is underlain by a sequence of middle Jurassic clastic and volcanic rocks which trend north-south to northwest-southeast. The west side of the property is occupied by andesitic volcaniclastic and volcanic rocks of the Betty Creek Formation. To the east these rocks are in contact with a narrow horizon of felsic volcanic rocks belonging to the Mount Dilworth Formation. Still further east there are sedimentary rocks of the Salmon River and Bowser Lake Formations.

Parts of the Frances 3 and 4 claims are underlined by a medium grained quartz monzonite. At the contact with the monzonite, the mudstones of the Bowser Lake Formation have been transformed to biotite hornfels with the addition of small amounts of pyrrhotite and lesser pyrite.

During the 2005 exploration program on Surprise Creek property a total of 279 rock and 8 silt samples were collected. These samples represented the abundant and diverse mineralization found on the property. All the property’s mineralization can be grouped into several types of which the most significant ones are presented below.

Types of mineralization found both in place and float include:

1. Extremely fine grained syngenetic pyrite, sphalerite and galena with high silver, mercury, and manganium hosted in black chert, limestone and mudstone.
2. Banded iron formation.
3. Chalcopyrite and molybdenite bearing quartz-pyrite-pyrrhotite veins and pods related to intrusion of quartz monzonite.

Types of mineralization found in float only include:

1. Very strongly silicified trachyte/latite with pyrite, sphalerite, galena, and chalcopyrite.
2. Precious metals bearing quartz with pyrite, arsenopyrite, chalcopyrite, galena, sphalerite and tetrahedrite.
3. Quartz with sphalerite and galena.

The first type of mineralization is by far the most promising of all mineralization types found on the property to date. It can be found mostly in numerous boulders and to much lesser extent in place. Most often, it occurs in intercalated black chert, limestone and mudstone which form layers a few cm thick. The layers very often display strong soft sediment deformation, frequently forming synsedimentary breccia. Mineralization consists of syngenetic, extremely fine grained pyrite with lesser sphalerite and galena; manganese oxides are common. Sulphides form thin laminae and disseminations, often concentrating in the matrix of synsedimentary breccia.

Content of zinc, lead, silver and mercury vary in a broad range from slightly elevated values to the highs of 7.61% for zinc, 1.1% for lead, 106 g/t for silver, and 33,800 ppb for mercury.

The second type of mineralization - banded iron formation is associated with the first type. It was found in place in three locations on the property. This type of mineralization is composed of intercalated laminae of white silica, jasper and magnetite 0.2 to 2.0 cm thick. The main occurrence of banded iron formation is 15-20 m wide. It strikes 310 degrees and dips about 70 degrees to the north-east. A few other occurrences of banded iron formation on the property are much smaller measuring only 1-3 metres in thickness.

There is a strong indication that the property may host Kuroko type VMS deposit, possibly with a high precious metals content. This conclusion is based on the following facts:

1. Presence of syngenetic zinc, lead and silver mineralization hosted in black chert, limestone and mudstone. Values up to 7.61% Zn, 1.1% Pb and 106 g/t Ag were obtained from these rocks. High mercury values, typically in the range of 40 to 100 times above the background level (with the high of 33,800 ppb) are closely associated with this type of mineralization.
2. This syngenetic mineralization is spatially associated with the felsic volcanic rocks of Mt. Dilworth Formation, the same stratigraphic horizon which hosts Eskay creek deposit. On the property, felsic volcanic rocks of this formation form a relatively thin horizon 70 to 200 metres wide within prevailing volcanic rocks of intermediate to mafic composition.
3. Presence of an eruption center located in the Surprise Creek area as indicated by outcrops of rhyolite (?) flow with distinct flow banding, as well as rhyolite (?) breccia.
4. Presence of banded iron formation.
5. Nearby presence (Todd Creek) of a big copper-gold epithermal system comprised of numerous pyrite-chalcopyrite dominated veins and stringers. This system very likely represents the footwall-stringer zone of Kuroko type VMS system.

Numerous boulders of sedimentary rocks with syngenetic zinc, lead and silver mineralization occur in several glacial valleys which join the main Surprise Creek valley over a distance of ten kilometers. They derive from an extensive horizon(s) hosting this type of mineralization, situated in the headwaters of these valleys. A portion of this horizon (at least 30-40 m wide) is exposed at the head of one of the glaciers. This horizon(s) most likely represents a distal facies (halo) of Kuroko type VMS system as indicated by the lack of volcanic material and alteration, and also by the fact that zinc is by far the most abundant metal with much less lead and no copper.

In conclusion, the gold bearing pyrite-chalcopyrite dominated veins and stringers of Todd Creek area and the black chert, limestone and mudstone with syngenetic zinc, lead and silver mineralization of Surprise Creek area probably represent two different parts of the same Kuroko type VMS system. The former represents the footwall-stringer zone and the latter distal zone (halo) of this system. This in turn implies that a massive sulphides body of Kuroko type can be located somewhere between these two zones. Substantial amount of gold in the presumed footwall-stringer zone and the abundance of silver in the distal zone indicate the potential for the occurrence of precious metals- rich Kuroko type VMS deposit.