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September 31st, 2010 - Auger Drilling: Results and Conclusion from the ALS Assays from the Monroe North dump at Dun Glen Project-Pershing County Nevada
From the Desk of Kevin M Murphy - CEO
The following Report was prepared for management by E L Hunsaker, our geologists and I am very pleased to share it with you.
Seven auger holes were completed to sample the Monroe area of the Dun Glen Project, Pershing County Nevada (Figure 1). Stonehouse Drilling & Construction, LLC provided a truck mounted auger drill and operator, and the holes were drilled using a 22 inch diameter auger bit. The dumps sampled were chosen because they had returned up to 0.2 ounces gold per ton (“opt”) from shallow surface trenching and locations were already permitted. Previous surface rock chip sampling had returned up to 1.2 opt gold from dump grab samples.
Eighty samples and four known standards were submitted to ALS Minerals for analysis. Samples were collected at selected drill intervals of 5 or less feet. Each drill interval produced up to 300 pounds of material. These samples were quartered and then sampled with 5 samples. The samples A to E were then recombined using a weighted average based on the weights provided by ALS for each sample. Following that the total drill hole assay value was calculated using a weighted average based on the combined A to E samples and the thickness of the drill interval. Table 1 shows the average gold and silver values.
Ten samples were resubmitted for metallic screen analysis based on very high results or anomalously low values.
Monroe North Dump Sample Interval (feet) Gold opt Silver opt
DGA-1 10 0.21 1.73
DGA-2 12 0.10 0.30
DGA-3 8 0.17 0.90
DGA-4 8 0.10 0.28
DGA-5 12 0.04 0.77
Overall Average 0.12 0.79
Table 1: Results calculated using weighted averages based on ALS Minerals Assays
The Monroe North Dump results returned an overall average of 0.12 opt gold and 0.79 opt silver from five auger holes (Figure 2). The tonnage for the North Dump is calculated to be approximately 3,700 tons using a cross sectional estimate. Using the weighted average for the samples collected, the dumps are estimated to contain 442 ounces of gold and 2,938 ounces of silver. At $1,200 per ounce for gold and $18 per ounce for silver the gross metal value in the dump is estimated to be $582,690 (Table 2).
The setting of the dump suggests that it could be moved with minimal impact to the surrounding area. The cost of moving the material to the I-80 intersection was estimated based on a tracked excavator and two 14 cubic yard dump trucks (Table 2). It would take approximately 31 days and cost a total of $117,600.
Totals 59280 Cubic ft Excavator & 2 dump trucks
3,705 Tons Total Loads 157
2,196 Cubic yds Loads/ hour 0.5
Gold Value (use $1200) $529,808 442 oz-Au Cost/ Hour $375
Silver Value (use $18/oz) $52,878
2,938 oz-Ag Hours/Day 10
Gross Gold and Silver Value $582,686 Days- Move 31
Total to move to I-80 ($117,619) Cost/ Day $3,750
Net Gross Metal Value $465,067 Total to Move $117,619
Table 2: Estimated and Assumed Costs for Processing Dumps
The results from the auger drill sampling demonstrate that the project contains dumps that can be moved and processed profitably. Seven additional dumps appear to have tonnage and initial geochemical sampling results sufficient to make them good candidates for the auger sampling procedure.
The following steps which we have designated Phase 2 are recommended to carry out a program of processing the Dun Glen dumps.
1. Coarse Gold Evaluation - in process
a. We have submitted select sample pulps from Monroe North Dump to ALS for additional Metallic Screen Analysis
2. Dump Processing Costs
a. Obtain contractor estimate for moving dump
b. Review auger sampling with BLM and amend existing Notice level permit.
We have a meeting scheduled for Sept.1st.
c. We have identified and are now evaluating potential toll mills
i. Newmont – Twin Creeks Mine, Carlin Facility
ii. Barrick – Carlin Facility
iii. Yukon Nevada – Jerritt Canyon
iv. Great Basin Gold – Aurora Mill (Mineral County)
v. Golden Predator – Springer Site
vi. Dan Cappes
3. Testing Remaining Dumps
a. We are currently reviewing our testing program with BLM
b. Amend existing Notice Level Permit to permit additional auger sample locations
Look forward to more Good News!!!!
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