Summary
The Golden Chest mine is located 2 kilometers east of Murray, Idaho. Since 2004, NJMC has completed a program of exploration, development and gold production at the Golden Chest. Exploration activities have included 3,415 meters of diamond drilling which resulted in a block of ore reserves on the Idaho vein containing 39,659 ounces of gold.

Development activities to date have included the construction of surface facilities, the completion of 500 meters of ramp, the mining of ore, and the establishment of a rock storage site. Gold production has been on an intermittent basis as mining activity alternates between driving the ramp and mining remnant blocks of material from the Katie and Dora veins. Ore is shipped to the Company’s mill facility in Kellogg, Idaho where a bulk flotation concentrate is then leached to produce a gold-silver dore’. Gold production has totaled approximately 2,000 ounces to date, and the Company plans to increase gold production to 10,000 ounces per year by completing about 400 meters of ramp from a new portal which is required to access the Idaho vein ore reserve block. The timing of the completion of the new portal and ramp will be dependent upon the Company’s ability to raise financing on favorable terms.

Golden Chest, road and North Idaho setting

Land Position
The Company's land position at the Golden Chest covers an area of about 500 acres. Approximately 270 acres is held through a mining lease with Metaline Contact Mines that calls for a sliding scale Net Smelter Return (NSR) royalty, and 41 acres of unpatented claims is held through a similar mining lease with a private corporation. Both leases require NJMC to pay a minimum of 3% of the net smelter returns to the lessor. An additional royalty ranging from 1% to a maximum of 3% NSR is payable, if the price of gold reaches certain trigger points as adjusted by the Consumer Price Index (CPI). About 195 acres are held through unpatented claims wholly owned by the Company but subject to a 1% Net Profits Royalty payable to Metaline Contact Mines.

Exploration and Production Plans
As mentioned above, the Company’s plan is to drive a new adit of about 400 meters in length to connect with the existing workings and begin a down-ramp to access the Idaho vein. This new adit will provide access to the Idaho vein ore reserve block which will provide about six years of mill feed for the New Jersey mill. Initial mining will focus for two years on a higher grade portion of the Idaho vein that averages 10.0 gpt gold and produce between 9,000 to 10,000 ounces per year. Ore will be shipped to the New Jersey mill in Kellogg.

During the initial two years of the mine plan, a significant core drilling program of up to 10,000 meters will be undertaken. The focus of the program will to upgrade the existing open pit resource to the reserve category and expand the total resource/reserve to 500,000 ounces. At this point, a feasibility study would be started to evaluate the economics of building a 1,500 tonne per day flotation mill at the site which could potentially produce 50,000 ounces per year.

The Company is seeking the financing to commence this mine plan through either selling a joint venture interest or completing an equity placement.

Geology
Gold mineralization is associated with a thrust fault. Gold-bearing quartz veins are hosted by folded siltite-argillite and quartzite of the Prichard formation. Two types of veins are found are the Golden Chest: banded veins and massive veins. The banded veins consist of white quartz with thin planes of dark gray argillite that may be partly replaced with sulfides. The other type of quartz veining is massive and typically quartzite hosted. Sulfide minerals found in the massive veins are pyrite, sphalerite, galena and chalcopyrite. Scheelite, a tungsten mineral, is also found in scattered pods throughout the veins.

View of the Katie Vein (White Quartz) on 965 Sublevel showing the intense folding associated with the vein

Drilling Results
New Jersey Mining Company has completed 3,415 meters of core drilling at the property since 2004. Highlights from this drilling are shown by the table below.

Newmont Exploration Limited (NEL) explored the Golden Chest property from 1987 to 1989 and drilled 2,656 meters of reverse-circulation drilling and 733 meters of core drilling.  The NEL drillholes are included in the property database which is used to calculate both the open pit and underground gold resources.

** Resources
The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms, such as "measured," "indicated," and "inferred resources," that the SEC guidelines strictly prohibit us from including in our filing with the SEC. U.S. investors are cautioned not to assume that any or all of measured, indicated or inferred resources are economically or legally mineable or that these resources will ever be converted into reserves. U.S. investors are urged to consider closely the disclosure in our Form 10-K and Form 10-Q.