KELLOGG, IDAHO. New Jersey Mining Company (Symbol: NJMC - OTC Bulletin Board) is pleased to report that the shareholders of Gold Run Gulch Mining Company have accepted NJMC’s share exchange offer. As a result, Gold Run Gulch Mining Company (GRG) will be merged into New Jersey Mining Company. New Jersey will issue 0.875 of a share for one share of GRG resulting in the issuance of 1,916,250 shares of restricted NJMC stock.

Gold Run Gulch Mining Company’s primary asset is the New Jersey mine property which is currently leased to New Jersey Mining Company. The merger will give NJMC title to 62 acres of patented mining claims, mineral rights to 108 acres of fee land, and about 130 acres of unpatented claims. The merger with GRG is a major milestone for NJMC and completes a goal set more than five years ago.

New Jersey Mining Co. will no longer pay a Net Smelter Royalty (NSR) on future gold production to Gold Run Gulch. The NSR royalty was 5% and increased in 1% increments as the price of gold increased to certain targets. In effect, the elimination of the royalty increases the gold price the company will receive by at least 5%. The lease also required a $200 per month advance royalty payment which will no longer be necessary.

In other news, the Company continues to pursue its gold and silver exploration program at several of its properties including the Silver Strand and Lost Eagle. The Silver Strand mine is a silver-gold vein hosted in the prolific silver-producing Revett formation. From 1978 to 1981 the Silver Strand produced 13,752 tons of ore grading 0.093 ounces per ton (opt) gold and 9.6 opt silver.

Management has decided to drill the downward extension of the Silver Strand orebody from the underground workings. This significantly reduces the length of the planned drillholes and will lower the risk of missing the ore shoot. Currently, a mining contractor is rehabilitating the 225 Level portal at the Silver Strand for establishment of a secondary escape-way. Drilling is expected to start near the first of November.

A ground geophysical survey has been completed at the Lost Eagle. The Lost Eagle vein is a quartz vein carrying sulfides that outcrops in the Revett formation. Micro-probe analysis of samples from the vein indicated the presence of gold and silver telluride minerals which is thought to be significant as tellurides are usually associated with high-grade gold deposits near alkaline-igneous bodies. No igneous body has been mapped in the area.

The geophysical program consists of an induced polarization [IP] and resistivity survey. Three survey lines each about 450 meters in length were completed. Two of the lines straddle the projection of the Lost Eagle vein while the third line straddles a fault or shear zone in an area where anomalous lead values were found by geochemical soil sampling. The purpose of the geophysical program is to identify potential drilling targets. Results from the geophysical survey are expected in about a month.

New Jersey Mining Company is involved in exploring for and developing gold, silver and base metal ore resources in the Coeur d'Alene Mining District of northern Idaho. The Company has a portfolio of five mineral properties in the Coeur d'Alene Mining District: the New Jersey mine, the Silver Strand mine, the Lost Eagle project, the CAMP project and the Wisconsin-Teddy project.