| Ashdown Project, Humboldt County, Nevada | |
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Golden
Phoenix Minerals signed a Letter Agreement with PRS Enterprises, Inc.
in September 2003 to act as manager and operator of the Ashdown
development project, located in Humboldt County, Nevada.
Final agreements have to be completed before full funding is
provided by PRS to Golden Phoenix for advancement of the project.
Ashdown contains a substantial gold and molybdenum resource
that could be developed into an operating mine.
Approximately
$8 million in past exploration and development drilling has been
conducted on the Ashdown property since about 1980.
This money was applied to drilling about 270 reverse
circulation and core holes, driving 1800 feet of tunnel to obtain bulk
samples of the molybdenite mineralization for testing, and conducting
several feasibility studies for open pit and underground mining
operations.
The
gold and molybdenum mineralization on the Ashdown property is found in
quartz veins that cross-cut diorite gneisses. The property is located
near a Jurassic granodiorite to granite intrusive, which underlies the
northern part of the Pine Forest Range.
Gold mineralization occurs as 20 to 100 micron flakes in the
quartz vein, while molydenite mineralization occurs separately from
the gold.
Average grade of the gold as previously reported from the 270
drill holes is about 0.125 opt while the molybdenum is about 2.9%.
Mining
of any potential ores will be by open pit and underground methods with
extraction possibly being done by flotation and gravity separation
methods.
Golden Phoenix Minerals intends to conduct mining, processing,
and reclamation operations.
Golden Phoenix has not yet calculated the overall resources or
mineralized material for the Ashdown project. The results will not be
announced until these calculations are made
Location, Land, Operating Interest
The
Ashdown gold-molybdenum project is located about 110 miles northwest
of Winnemucca and 10 miles southwest of Denio Junction in Humboldt
County, Nevada.
The property covers about 6-square miles and is controlled by
196 unpatented mining claims in the northern Pine Forest Range.
Access to the property is gained by following a dirt road
located about 10 miles west of Denio Junction off of paved State Route
140 for about three miles to the southeast to the property.
The project is located at an elevation approximately 4,700 feet
on the northwest flank of the Pine Forest Range.
The
topography in the project area is moderately steep and rugged, and is
typical of the hills flanking the main mountain ranges in northern
Nevada.
They are cut with V-shaped canyons, are arid, and only lightly
covered with small sagebrush.
There is very little overburden over most of the property.
Overburden of any consequence is found only in the lower areas
in the main outwash channels.
There are a considerable number of cuts and adits on the
gold-bearing quartz veins.
Very
little is recorded of the early history of the Ashdown Mine.
It is thought that the Ashdown Mine was first operated sometime
in the 1880s. Up to about
1942, which would shut down any ongoing gold production from the L-208
War Act, about 52,000 ounces of gold averaging 0.31 ounces per ton was
produced.
Modern
exploration was first initiated in 1980 when American Copper and
Nickel Company (ACNC), the U. S. subsidiary of International Nickel
and Copper Company (INCO) entered into an agreement with the property
owners to purchase the Ashdown Group of claims.
Ultimately, they sold their property to ACNC and received a
royalty, which is still current today.
In
1982 Outokumpu Mines, Inc. (OMI) a subsidiary of Outokumpu Oy, a large
Finnish mining company, entered into a joint venture with ACNC to
explore and develop Ashdown. This
joint venture continued until 1985 with a large number of drill holes
drilled into multiple targets. They
had developed 325,000 tons of gold ore grading 0.152 opt and 146,000
tons grading 2.74% molybdenum and a low grade molybdenum resource of
600,000 tons at 1%.
In
1986 Westwater Resources Inc. entered into an agreement with ACNC/OMI
to buy their interest in the Ashdown Mine in return for a retained net
profits interest. Then in
1987 Westwater entered into a sales agreement with Win-Eldrich Mines
Limited (WEX), a Toronto public company and retained a 1% uncapped
royalty. A feasibility study completed in 1987 indicated that the
calculated reserve is 497,000 tons of 0.115 opt Au.
WEX further renegotiated the royalties to ACNC and OMI reducing
them to a reasonable level. In
1988 and 1989, WEX undertook extensive exploration and drilling with
the results expanding the resource to 1.07 million tons at 0.088 opt
Au.
In
1990 Billiton Minerals, a subsidiary of Royal Dutch Shell, entered
into an option to purchase agreement with WEX and began extensive
drilling and metallurgical work. In 1991 Billiton completed its
feasibility study and reported diluted reserves of 1.02 million tons
at 0.077 opt Au. Billiton
did not exercise its option because Royal Dutch Shell decided to get
out of the gold mining business.
In
1992 North Lily Mining Company entered into an option to purchase
agreement with WEX, completed 5 holes and performed minor
metallurgical work. They
did not exercise their option.
In
the period from 1995 to 2002 declining gold prices caused a lack of
interest in the project from potential joint venture partners.
Several of the royalties disappeared including those with ACNC
and OMI.
With
rising gold prices, interest in the property materialized in 2003 with
new agreements reached with PRS Enterprises and Golden Phoenix
Minerals, Inc.
Historical
production at Ashdown was from a high-grade quartz vein system with an
average length of 1000 feet and an average thickness of over ten feet.
Underlying the gold system is a similar series of quartz veins
containing high-grade molybdenite.
Analysis of both vein systems suggests that the veins occupy en
echelon tension fractures that trend northwest and dip southwest,
sub-parallel to the trend of the Pine Forest Range. The gold
mineralization is contained in two zones averaging about 12' thick
each, often containing massive quartz, dipping 30-40 degrees
southwest, sub parallel to the hill slope.
The silver to gold ratio is 1 to 1.
Similar
large-scale quartz veins occur in Vicksburg Canyon, located just north
of Ashdown, and Cherry Gulch, located just south of Ashdown. Vicksburg
contains gold and molybdenum in drill cuttings, and Cherry Gulch
contains gold and molybdenum anomalies in rock chip and stream
sediment samples.
The
quartz vein system at the Ashdown Mine is hosted in a Jurassic aged
metasediments and a Cretaceous aged quartz diorite.
These host rocks are unconformably overlain by Tertiary
volcanics, which locally contain clasts of the Mesozoic rocks and the
quartz vein system in a basal conglomerate.
None of the volcanics are mineralized and therefore, the quartz
vein system predates the Tertiary volcanic sequence.
The
massive nature of the veins, which can be up to 30 feet thick, and the
lack of significant epithermal indicator elements such as mercury and
arsenic support the interpretation that the veins are part of a
mesothermal system comparable to the Mother Lode vein system of the
Sierra Nevada in California.
Neither the host rocks nor the mineralization have been dated
by radiometric methods.
Mesothermal
mineralization appears to be limited to Mesozoic crystalline rocks.
The Hall Mine, south of the Cowden Mine in the southern
Pueblos, contains showing of copper and molybdenum sulfides in
metamorphic rocks and the Cold Springs Mine north of Ashdown in the
northern Pine Forest Range produced a small amount of tungsten and
copper from a quartz vein system in quartz diorite.
No
mineralization has been identified in the youngest of the Mesozoic
intrusive rocks, a Cretaceous quartz monzonite.
This unit forms Mahogany Mountain and Fisher Peak in the
Ashdown area.
Mineralization occurs north, west and south of this rock unit.
Early mineral rich fluids generated by the quartz monzonite
magma, or by magmas of unexposed intrusive rocks, may be responsible
for the mesothermal quartz vein mineralization in the northern Pine
Forest Range.
The
different companies that explored the Ashdown Mine have calculated
reserves many times over the years.
Golden Phoenix is currently compiling all the drill hole
coordinates and assay information into a database so that we can
calculate gold and molybdenum resources. This information will not be
made public until we are confident that the work is thorough and
correct.
The
Company is currently performing a due diligence of the property, which
will take from 2 to 6 months to complete.
As part of this due diligence, an updated feasibility study
will be completed and permitting for both exploration and a potential
mine operation will be initiated.
Because a potential mine operation entails a number of permits,
this may take 18 to 24 months to complete.
After
about six months and early next year (2004) a drilling program will be
initiated to confirm some of the earlier drill results and to step out
on some open ended mineralized drill holes.
With the completion of a number of critical items on our timeline, construction of a new production facility could begin in 9 to 12 months. Production could begin in about 2 to 3.5 years.
