Geotextile Dewatering Bag Test - Oct 2010
Nevada Rae Gold, Inc. ("NRG") owns and operates the Black Rock Canyon Mine. The information on this page is partly excerpted and summarized from a 43-101 technical report prepared in June 2010, and historical property reports, prepared for previous property owners, by Bharti Engineering ("Bharti") and Robertson Research ("Robertson"). The Bharti and Robertson reports are not 43-101 compliant. NRG has mining rights to a portion of the property covered in the Bharti and Robertson reports. The Company has identified a resource, in the lower Black Rock Canyon and not including other areas under claim, of almost 1.2 million yards of gravels with an estimated gold grade of up to 0.5 grams per yard (grade based on a limited sample location). This resource is permitted and bonded and NRG plans to process up to 480,000 yards per year, for three years, producing 6,000 to 12,000 ounces of gold per year. Following the first full year of normal operations NRG plans to expand the permitted area to cover more of its claims and plans to double the size of the screening plant in order to increase production into the 12,000 to 24,000 ounce range. The resource size indicated above is strictly limited to the area of Black Rock Canyon that NRG has studied sufficiently to identify in its 43-101. Future gold grade testing and seismic work will establish the size of the remaining resources at Black Rock Canyon, Tubs Srpings, Mud Springs and other areas under NRG control.
In June 2011, NRG leased additional claims known as the B&B claims, that were studied in the Bharti and Robertson reports increasing the estimated gravel area that NRG controls. For more information see the press release dated June 14, 2011, August 2, 2011 and August 22, 2011
Property, Location and Ownership
The Black Rock Canyon Mine project consists of 67 Bureau of Land Management ("BLM") mining claims, owned by NRG; 440 acres of private land ("Pipeline 440"), leased by NRG from Bullion Monarch Mining Inc. ("BMM") of Orem, Utah; and 13 acres of private land ("Mill Site") owned by NRG.
The Mill Site has water wells and rights, buildings and a gravel plant consisting of washing and screening components and a gold recovery circuit, all built and owned by NRG. The claims and site are bonded and permitted for mining with the Nevada Division of Environmental Protection ("NDEP") and the BLM.
The Black Rock Canyon Mine is located in Lander County, Nevada, 3 miles south of the town of Crescent Valley on State Highway #306. The BLM claims and Pipeline 440 are four miles northwest of the Mill Site.
Geology and Mineralization
The property consists of alluvial/placer gold deposits within three main drainages; Black Rock Canyon, Mud Springs Gulch and Tub Springs Gulch. These deposits are typically 100 to 300 feet wide and can reach depths of up to 90 feet. The drainages flow in an easterly direction and the thickness of gravel is shown to become progressively greater to the east, where the alluvial/sedimentary material was identified as being in excess of 500 feet thick at the mill site.
Coarse gold (+60 mesh), is thought to originate from quartz veins developed locally within and on the periphery of the granodiorite stock, which forms part of Granite Mountain. The coarse gold is only known to occur in the uppermost sections of the drainages.
Project Status, Development and Operations
Upon acquiring the property, NRG contracted out the preparation of the Plan of Operation and the Water Pollution Control Permit. Permits were issued in 2005 and 2006 and NRG proceeded to acquire earthmoving and screening plant equipment for the Mill Site.
A 200 yd3 per hour screening plant was designed in 2005 and built in 2005 and 2006. Trial mining and plant commissioning took place in 2006-2007. A number of challenges were encountered with the plant and mining equipment and over the next 2 years, these issues were addressed. The most recent modifications were the installation of scrubbers to more thoroughly wash the gravels, as well as the installation of geotextile bags to desand the plant process water.
During the trial mining and plant commissioning, over 60,000 yd3 of gravel were processed. When NRG shut down the plant in October 2007, 370 ounces of gold had been recovered. This represents a grade of 0.2 g/yd3 recovered, however sampling of the plant tailings indicated that gold recovery was often less than 50% due to insufficient washing and screening and muddy process water.
While there are currently no 43-101 reserves on the property, a substantial geological resource can be calculated based on historical data, the mining and trenching program done by NRG from 2006-2007, as well as the seismic survey in 2007.
Historical Mineral Resources
The resources discussed in this sub-section are not 43-101 compliant.
Previous reports prepared by Robertson Research and Bharti Engineering outlined resources in the area of NRG claims and leases as follows;
Robertson - 8,140,000 cubic yards with an average grade of 0.027 ounces per yard.
Bharti - Proven 1,980,000 cubic yards at 0.034 ounces per yard, Probable 6,300,000 cubic yards at 0.031 ounce per yard and Potential 30,000,000 cubic yards with no defined grade.