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Fernley Gold Inc., a subsidiary of Pacific Gold Corp., entered into a lease agreement in 2004 for the right to mine 36 claims covering 640 acres of the Lower Olinghouse Placers. The claims are known as Butcher Boy and Teddy, and are located approximately 34 miles east of Reno, Nevada just off Interstate 80.

From historical reports, the Butcher Boy and Teddy Claims contain up to an estimated 445,000 ounces of gold in up to an estimated 30,000,000 cubic yards of alluvial gravels. The average estimated grade is 0.4 grams per cubic yard.

This property is located in a rich mining area with extensive historical data available, including test and sampling results. The lease offers the exclusive right to mine for placer and lode gold, as well as other minerals and metals.

In 2007 Fernley Gold, Inc. performed a limited sampling program that confirmed estimated gold grades as indicated in the Historical reports. The Company has filed a Plan of Operations with the BLM to begin mining operations. Once the plan is approved, the Company plans to begin mining and screening gravels on the claims and then process the concentrated ore offsite. Prior to beginning mining operations the Company plans to complete a seismic survey in order to acquire a complete picture of the gravel deposits.

Historical Mineral Resources

Both lode and placer gold have been mined from the district since the 1860's. 1901-1903 was the period of the greatest activity. In the 1930’s there was a brief revival of activity. Lode production from 1902-1921 was recorded at 24,700 ounces. Total production through 1959 was estimated at 36,000 ounces. During 1985 to 1989, several companies including Peter Kiewit Co., Alhambra Mining, and Cliff Resources operated large scale placer gold mines at the head of Olinghouse Canyon. They reported good profits from these operations. Later Phelps Dodge optioned the properties to Alta Gold.

The grades observed in the various members tend to be predictable. These are:


Upper Member
Grades vary between 0.007 and 0.012 ounces per cubic yard, with the lowest grades occurring in the finer sands and gravels at the top of the member. Occasional gravel bars carry higher grades, but the average is as stated.

Middle Member
This member represents a period of high depositional energy in the stream environment, and grades range between 0.015 and 0.026 ounces per cubic yard.

Lower Member
Grades are slightly higher than in the middle member which it resembles. This is due to the tendency of alluvial gold to migrate downward due to stream or chemical remobilization. Grades in this member range between 0.013 and 0.050 ounces per cubic yard in the deepest levels.

During the late 1930's Goldhill Dredging, and in the 1980's Southern Pacific completed extensive drilling and detailed testing of the deposit. The purpose of this drilling was to delineate the placer gold resources. About  of the holes penetrated the gravel to the bedrock. The maximum hole depths were on the order of 120 feet below the surface. Drill holes within the area of the deposit were located on the least 100 feet centers and 100 feet line spacing.

Also in the 1960's Watts, Griffith, and McQuat, a Canadian consulting firm, drilled several 30 inch diameter holes in the central orebody.

The latest drilling was performed by New Gold and American resources by Vaughn Construction in the late 1980's and early 1990's.

Previous mining of the deposit has exposed the ore gravels allowing a more accurate interpretation of the cuttings returned from drilling. For instance, there is a coarse boulder layer of gravel in the middle of the deposit that the results from the drilling showed low values, but when processed, this gravel was the highest grade in the zone, likely caused by the presence of nuggets.