2018 Assay Reports
Exploratory drilling was conducted at the 112-foot level, and core samples were assayed to determine the composition of the rock. Because of historic mining at that level, it was assumed that gold wouldn’t be encountered until greater depths were reached. However, the results of the assay were remarkable. Of the seventeen core samples, the high gold value of 53.8 grams per ton (“gpt”) was over an intercept of 1.2 feet. Five grab and channel samples were taken at the same level with one reporting gold at 90.5 gpt with silver at 476 gpt; a second sample came in with gold at 53.8 gpt with 89 gpt of silver, and a third with 19.8 gpt that contained the presence of free gold (literally pieces of gold). The assays are attached as exhibit A. By way of comparison and to understand the significance of these results, the operating mine in the United States with the richest gold veins reports an average of 44.1 gpt of gold. The Company believes these assay results validate its business plan and projections. These assay findings provide additional confirmation of the statements of mining historian Dr. David Forsyth, who recently told the Boulder Weekly that the old timers only got ten to fifteen percent of the gold deposits, and eighty-five to ninety percent of the gold in what was once considered the richest square mile on earth is still there.
The acquisition of an option to acquire the Clay County Mine
The Company is also pleased to announce that its subsidiary, Clay Mine Acquisition Company, LLC, has executed an option to acquire the Clay County Mine (the “Clay”) adjacent to the Bates Hunter. The Clay consists of approximately 18 acres above ground. Like the Bates Hunter, the Clay is a historic mine whose workings date back to the Colorado Gold Rush in the late nineteenth century. Unlike the Bates Hunter, the Clay is not served by a vertical shaft but rather by a series of inclines/declines that have direct access from a mine portal on the property. To date the inclines/declines have connected with the historical tunnels and shafts reaching over four hundred feet below grade. In this area other mines have successfully extracted ore from depths of over 2000 feet.
Management has reviewed a geological study of the Clay that was prepared in 1981, the last approximate time there was any activity of note on the property. Management believes that based on that report and other investigations, there is a substantial likelihood that the Clay will produce significant amounts of ore – both gold and silver. As to the presence of gold, the 1981 report’s author stated that, “Total positive, probable and possible ore is estimated at 253,600 ounces.” The report’s author believed that 80% is recoverable. At $1280 an ounce, the total recovery would be $259,686,400. It is important to note that these estimates are only directed to recovery up from the four-hundred-foot level. The adjacent Pittsburgh Mine recovered gold to depths of 2000 feet and if similar geology is encountered at the Clay, substantial quantities of gold could be recovered. Although there will be numerous costs associated with rehabilitating the mine, one cost that the Clay will not face, unlike the Bates Hunter, is dewatering. The Clay drains directly into the National Tunnel and is therefore completely dry. Combining the operations of the Clay and Bates Hunter will result in economies of scale and improve profit margins. The Option allows GS Mining sufficient time to perform its own studies and due diligence. Option payments may be made in Moria tokens held by GS Mining in its treasury. Therefore, the Option will have no effect on funds otherwise required for Bates Hunter operations and may create additional liquidity for the tokens.
Dewatering Reaching 226 Feet below the collar!
On December 29 the dewatering reached two hundred and twenty-six feet below the collar. Dewatering continues faster than projected. As the water drops the crew follows behind replacing ladders, platforms, and infrastructure where needed. Work on a platform at the 160-foot level commenced in the last quarter. When completed additional exploratory drilling will be done at this location while also commencing a drift to reach the German shaft.