Big Strike - Rhea, Whitewater & Referendum Properties

A large and strong multi-element geochemical anomaly, measuring at least 3,000 metres by 2,000 metres, was located at Rhea in the late 1980's through an extensive soil survey. The soil values suggest the potential for a skarn-type deposit similar to the past producing Second Relief Mine, the third-largest gold-enriched skarn producer in British Columbia, just five kilometres to the south of Rhea - on strike and in the same Archibald Formation.

As announced May 3, 2012, Rainbow has staked almost the entire area between the Rhea Property and the former Second Relief Mine. These claims cover an eight-kilometre-long, five-kilometre-wide section hosted by Nelson intrusives while the structurally important Red Mountain fault cuts across the newly-staked area from north to south.

Meanwhile, the former Silver King Mine - the main historic producer (silver and copper) in the Nelson area - is six kilometres to the northeast of the six contiguous Rhea claims. Two large masses of diorite porphyry, possibly related to the prolific Silver King Porphyry, have been identified at Rhea through historical work.

Due to a complex history of magmatic and tectonic activity in this part of the Kootenay Arc, a variety of mineral deposit types do exist in the area.

The nearly 1,500-hectare Referendum Property is immediately north of both Rhea and Whitewater. Two major areas of interest have been identified at the Referendum based on a review of previous limited exploration work and artisanal mining records.

On the eastern side of the property, Rainbow will be investigating a quartz-tourmaline stockwork system with open-pit potential. Historically, small-scale gold production from at and near-surface has occurred within an alteration zone measuring approximately 700 metres by 150 metres with ore processed at the Trail Smelter. This zone has never been drill tested and is open in all directions. A grab sample containing quartz with banded tourmaline from a trench on this eastern side returned 2.51 oz/t Au (78.1 g/t) as announced by Rainbow October 19, 2012 (Rainbow cautions that grab samples may not be representative of mineralization on the property).

The western portion of the Referendum, meanwhile, has not been systematically explored for the potential of hosting a copper-gold porphyry deposit. Elevated copper-in-soil geochemistry and the presence of feldspar-porphyry, chloritic shears and malachite staining were reported over a two-kilometre strike length in 2005. A three-metre long chip sample, across the apparent width of one of the malachite stained outcrops, returned an assay value of 4.44% Cu and 13 g/t Ag. Only three holes totalling just 300 metres have ever been drilled on this western portion of the Referendum Property (by Acrex Ventures Ltd. following the surface discovery in 2005). Several sections of mineralization were intersected by Acrex with values up to 0.25% Cu and 0.86 g/t Au before the company turned its attention to other properties.

A copper stained occurrence discovered recently by Moose Mountain Technical Services along a deactivated logging road assayed >10000 ppm Cu (>1% Cu) as announced by Rainbow October 19, 2012.

Whitewater comprises 138 hectares and is contiguous to claims acquired by Rainbow late last year that enlarged the Rhea Property. Gold-bearing veins were first discovered at Whitewater in the late 1800's and minor production came from short adits between 1890 and 1930. A limited amount of historical drilling has identified a vein system that is not yet well understood.

Rainbow conducted some initial prospecting at Whitewater over the summer. Two grab samples from a trench exposing numerous quartz veins in a mafic host rock (diorite) returned 2.06 oz/t Au (64.1 g/t) and 0.86 oz/t Au (26.9 g/t) as reported by Rainbow October 19, 2012 (Rainbow cautions that these samples, while encouraging, may not be representative of mineralization on the property). The samples were taken from different veins 30 metres apart. This part of the Whitewater Property has seen little exploration other than an access road and trench.