Located three miles east of Kellogg in Idaho’s Silver Valley, the New Jersey mine property includes a 100 tonne-per-day mill (mineral processing plant) that includes crushing, grinding and flotation circuits along with a concentrate leach plant that is capable of producing gold-silver dore’ bars. The mine property hosts the gold-bearing Coleman vein system, a base metal Sullivan-type exploration prospect known as the Enterprise, and another gold prospect known as the Scotch Thistle.

The Company’s land position in the New Jersey area of interest covers approximately 430 acres. Two mineral leases covering 130 acres are included in this total and require the payment of Net Smelter royalties. More detailed information can be found in the Company’s Annual Report Form 10-KSB.

New Jersey Flotation Mill and Concentrate Leach Plant

Historic prospecting activity took place at the New Jersey mine in the late 1800’s and early 1900’s. About 2,500 feet of development workings including drifts, crosscuts, shafts and raises were driven at that time to develop the Coleman vein and a related branch vein. However, only about 200 feet of development were on the Coleman vein structure itself. Management believes the lack of development work on the Coleman vein by the old-timers leaves considerable potential to find an ore shoot within this strong vein structure.

Since 2001, the Company has drilled 14 holes for a total of 1,765 meters to explore the Coleman vein and associated zones of gold mineralization. The drilling confirmed the continuity of the Coleman vein system and discovered a broad zone of low grade (0.70 gpt gold) gold mineralization known as the Grenfel zone. Reserves on the Coleman vein were not increased as the drilling was too widely spaced to meet the criteria for a reserve calculation. The best intercept was in DDH02-02 which assayed 2.76 gpt gold over 12.5 meters including 2.5 meters of 6.80 gpt gold. In 2008 about 400 meters of drilling was completed at the Scotch Thistle gold prospect revealing areas of silica enrichment and alteration, but no economic intervals of gold mineralization.

In 2008, the Company completed an underground exploration program of drifting on the Coleman vein on the 740 level. A total of 84 meters of drifting were completed with 20 meters of that on the vein before it was displaced by a fault. The remainder of the drifting was in waste material and was directed at finding the down-dip projection of the vein found by DDH02-2. The vein was not found, but a diamond drill station was established to allow for underground drilling to probe for the vein.

Reserves
The reserves at the New Jersey mine as of this date are those contained. The vertical extent of underground stope block from the surface outcrop down to the Keyhole Tunnel level. Grade estimation for the block is based upon calculated head grades from production from the Coleman vein over the past two years, and from chip samples of the vein in the Keyhole Tunnel.

The reserve tonnage is diluted. That is, the expected dilution from underground mining is accounted for in the grade and tonnage of the reserve block. The ounces stated in the above table are contained ounces. The cutoff grade used was 1.5 grams/tonne gold. The cutoff grade is based on historical costs of underground mining on the Coleman vein with a flotation processing plant recovering 85% of the gold. Gold prices used are based upon a three year average or $23.27/gram ($723.60/troy ounce). Proven and probable reserves are combined as they cannot be readily separated.