EM Anomalies in Central and Southeastern Labrador, Canada

Capella holds an extensive land position in Newfoundland and Labrador with over 3,000 mineral claims covering more than 75,000 hectares of land. The Company is actively exploring for nickel, copper, chromium, titanium and other base metals in the central and southeastern areas in Labrador.



The Newfoundland and Labrador claims were included as part of the extensive airborne geophysical surveys conducted during the summer of 2007 which included magnetics, electromagnetics and radiometrics. More than 10,000 line kilometres were flown at 150 metre spacing intervals presenting a high-resolution cueing tool. Over 50 Nickel/Copper and other base metal Electro-magnetic ("EM") anomalies were identified on the Labrador properties, in search of a Voisey's Bay-Style deposit. Voisey's Bay is one of the world's richest nickel-copper-cobalt deposits, located in northern Labrador.

Capella set up a forward base of operations in Labrador to support ground-truthing of geophysical data and cue-in for over 200 permitted drilling targets. During the summer of 2008 a total of 18 of the top ranked EM anomalies were targeted for ground follow-up. A nine-person team was dispatched to validate and rank the anomalies in five locations around Snegamook Lake and Wilson Lake in Capella's Central Claims area in Labrador. Surface sampling results from the recent summer program include peak copper assay values greater than 1%.

Central Claims Area

In the central Labrador claims area the Seal Lake Group (quartzites, shales, volcaniclastic sediments and flows) is bounded to the north by the Harp Lake Anorthositic Complex and a window of Eastern Churchill Province Gneiss. Foliated granitic gneiss also of the Southeast Churchill Province crop out on the west side of the basin (Snegamook Lake Gneiss). The North Pole Intrusive suite component of the Trans-Labrador Batholith has been thrusted north onto the Seal Lake Group and has deformed and metamorphosed the southern parts of the assemblage. The volcanic and volcanogenic sedimentary rocks in the central Labrador area reportedly contain economically viable base metal deposits.

After completing the regional geophysical surveys in 2007, Capella completed an 8-hole (1800m) diamond drill program in the Snegamook Lake area while review and interpretation of the geophysical survey results continued. The Capella team of geoscientists identified and ranked 18 EM targets for immediate nickel-copper and other base metals exploration. Field crews were dispersed for reconnaissance and ground verification of these anomalies during the summer of 2008. A total of 99 surface samples were collected and analysed for a suite of 62 major an trace elements by the ICP-MS method. Peak Copper assays in excess of 1% were discovered. Five main diamond drilling target areas were established based on geophysics, geology and assay results. These areas include Snegamook Lake and Wilson Lake. Capella plans to drill five of the highest priority targets in 2009.

Southeastern Claims Area

The southeastern claims group comprises an area where the geology is dominated by the metamorphic suite (hornfels facies, gneiss, paragneiss, amphibolite) but anorthosite and granite have also been reported in the area. Capella's claims group is concentrated on a broad area of predominantly northwest to north trending structures.

Geophysical targeting in the southeastern claims area has resulted in the identification of seven areas of interest. The company expects to commence a field audit of these areas in 2009.