Summary
In March of 2008, New Jersey Mining Company (NJMC) signed a definitive agreement with Newmont  North American Exploration Limited, a subsidiary of Newmont Mining Corporation (NYSE: NEM) to form a joint venture to explore for gold deposits within a 38 square mile area north of Murray, Idaho.  The joint venture is known as the Toboggan Project and covers all of NJMC’s claims within this area except the Niagara copper-silver property.  Currently, the joint venture’s claims cover an area of about 4,800 acres.

Under the definitive agreement terms, Newmont can earn a 51% interest in the joint venture by spending $2,000,000 over three years, and can increase their interest to 70% by spending an additional $10,000,000 or completing a feasibility study in years four through seven, whichever comes first.  Newmont’s exploration plans for the first year include rock sampling, soil sampling, stream sediment sampling, and mapping.

Looking east towards the Golden Reward and Mineral Ridge prospects in the Toboggan Project area.

Geology
Within the joint venture area are several promising gold prospects with major tonnage potential:  the Golden Reward, Gold Butte, and Mineral Ridge.  The three gold prospects are structural zones related to alkaline magmatism.  The geochemistry of the gold mineralization is typified by low base metal content, gold and silver telluride minerals, molybdenum, and potassic alteration.  Gold deposits related to alkaline magmatism are attractive exploration targets because they can be large and high grade.  Gold deposits related to alkaline systems can contain up to 30 million ounces of gold.  Examples of gold deposits associated with alkaline magmatism are Cripple Creek, Colorado and Porgera, Papua New Guinea.

Additionally, their low sulfide content and carbonate content makes these types of deposits less likely to produce acid drainage thereby reducing their impact on the environment.  These deposits can be overlooked due to the often inconspicuous nature of the mineralization and that related placer deposits are often poorly developed due to the telluride and/or pyrite mineralization found in such deposits.

The presence of telluride minerals along with the presence of alkaline intrusive rocks, areas of potassic alteration, and geophysical tests indicating a deep conductor has led NJMC to believe the gold mineralization in the Toboggan project is associated with a deeply buried alkalic intrusive.

PROSPECTS

Golden Reward
The Golden Reward prospect  has been identified by soil sampling, which, to date, has outlined an area that is up to 240 meters wide by 400 meters long with average gold-in-soil assay of 0.184 gpt gold.  A second mineralized zone 170 meters wide was discovered by soil sampling east of the main zone on the Golden Reward claim block as well as several smaller gold-in-soil anomalies.  High grade float contained visible gold and telluride minerals and assayed 67.6 grams per tonne (gpt) gold and greater than 100 gpt silver.  No historic workings have been found within the Golden Reward zone.

Gold Butte
The Gold Butte prospect consists of a zone of pyritic, silicified, breccia parallel to the axial plane of a small fold in the Prichard Formation, on the east limb of the north-trending Trout Creek Anticline.  The mineralized zone outcrops over a strike length of at least 200 meters and has a vertical extent of 120 meters. Soil sampling indicates the zone may continue north for at least another 400 meters, with a width of 75 to 90 meters. Initial surface sampling of mineralized rock yielded ore grade assays ranging from 3.63 to 18.65 gpt gold and averaged 8.86 gpt gold.   Historic workings are present at the Gold Butte prospect and consist of seven adits connected by a system of narrow roads. Most of the underground work appears to have been completed by 1941, and along the eastern margin of the mineralized zone. The average grade of nine samples collected by ASARCO geologists in 1941 within the underground workings was 6.4 gpt gold.  Two holes were drilled on the Gold Butte prospect in the 1980’s.

Mineral Ridge
The Mineral Ridge prospect consists of two zones identified by soil sampling by NJMC and reverse circulation drilling by a previous operator. Nord-Pacific conducted a soil sampling program in 1991 and discovered a gold anomaly 240 meters wide by 1,650 meters long, which led to a drilling program where they drilled 9 holes for a total of 850 meters of drilling, and each hole intercepted anomalous gold mineralization. An eastern mineralized zone mapped by NJMC was not drill tested by Nord. A sample of quartz-pyrite float from this eastern zone assayed 38.4 gpt gold, 19.6 gpt silver and 61.4 ppm tellurium.

CA
Another identified prospect in the Toboggan Project is the CA property. The CA prospect was staked by the Company in 2006 over a large geophysical anomaly in the Toboggan Project area. The geophysical anomaly was discovered in 1984 by Cominco American Inc. (now Teck Cominco), and covers an area of two square kilometers. Cominco discovered the anomaly using CSAMT, a method used to determine the electrical resistivity of the ground. Data from this survey indicated the depth to the conducting body was from 450 to 670 meters below the surface. In 1987, Cominco American drilled a hole 500 meters in depth that was located on the eastern edge of the anomaly. It appears that the hole was located too far to the east, and that it was not drilled deep enough to investigate the large geophysical anomaly.

Other Prospects

The Lost Eagle prospect is a narrow quartz vein with mineralization consisting of galena, pyrite, hessite and petzite. Hessite and petzite are silver and gold-silver telluride minerals, respectively, that are usually associated with high-grade gold deposits near alkaline-igneous bodies. A two-hole drilling program completed by NJMC in 2003 revealed abundant alteration including carbonate enrichment, potassic alteration, and a halo of specular hematite and pyrite with occasional galena. This type and scale of alteration suggests a large hydrothermal system.

The SnowSlide prospect is located in Toboggan Creek.  The target is a high-grade gold-telluride vein system where quartz boulders were found in a small creek and assayed 12.1 gpt gold, 18.6 gpt silver, and 24.5 ppm tellurium.  Nearby is an alkaline intrusive body.

The Independence prospect is a sulfide-bearing quartz vein system that was the subject of previous exploration work early in the 20th Century.   The vein contains pyrite, galena, chalcopyrite, and sphalerite.  While the vein contains mostly base metal values, it does contain significant precious metal values and tellurium.