VIRGINIA CITY, Nev., Aug. 18, 2004 (PRIMEZONE) -- GoldSpring, Inc. (OTCBB:GSPG) operates its Plum Mining, Billie The Kid gold and silver cyanide heap leach project located just outside Virginia City, NV and on Thursday, August 12, 2004 hosted a Community Open House from 3-6PM. The event drew over 500 attendees who started arriving around 2:30 and left after 7:00PM. Tours of the Billie The Kid open pit mine as well as the complete Plum processing facility were enjoyed by a standing room only crowd. Politicians, residents, State regulators, media, investors and tourists all had positive comments on the operation and were thankful to be invited to a true open house. Food and beverages were served by the Plum/GoldSpring crew and entertainment was provided by Virginia City's Jesse James and Band. The Silver City Volunteer Fire Dept. provided the BBQ used in food preparation and raised donations to rebuild their recently burned down historical school house. The highlight of the event was the pouring of 42 pounds of gold and silver dore at about 4:30 PM. The event was filmed so all could see at their convenience. The dore was shipped to Johnson Matthey refinery in Salt Lake City, Utah from Virginia City. The dore represented about a third of the precipitate material recovered from the Merrill Crowe plant. The balance was poured yesterday.
Plum Mining is steadily producing both gold and silver, which is successfully being recovered through the new Merrill Crowe system. The ratio of gold to silver in recovered dore is approximately 20% gold and 80% silver, or 4 to 1. This occurs due to the relative concentrations of gold and silver in the pregnant solution and is exactly as expected. Recoveries are running 98-99% of metal in solution. Total metal recovery will only be determined at the time of completion of the heap leaching and is expected to be in the mid 80% range. There are regular shipments to Johnson Matthey Refinery, Salt Lake City, Utah, which has already received over 1,400 ounces of gold and 6,000 ounces of silver from Plum.
To clarify operating information reported in the recent 10Q, the transition from American Asphalt to Degerstrom in Q'2 2004 as mining contractor involved re-permitting the air Quality permit with NDEP. We had initially been permitted for 160 tons per hour and Degerstrom brought equipment with capacity of 650 tons per hour. Our initial goal was to move to 400 tph and we had received initial approval to do so as was announced at the shareholder event in June 2004. A subsequent revision by NDEP Air Quality personnel brought the acceptable level back to 225 tph. The 1000KW generator now being used is being replaced by grid power in the next few weeks, which will allow the production rate to grow. We are working with NDEP to make adequate modifications to achieve the 400 tph model. We also enjoy a Special Use Permit from Storey County that allows us to operate everything 24/7. The Degerstrom operation is able to produce as much on a single shift at 40% less cost than what American Asphalt could produce in two shifts.
To clarify income/revenue: We did not sell any of the delivered gold in Q'2 2004 which resulted in no revenue from production. We did however, execute buy and sell derivative contracts and earned $395,150 from this exercise. This was reported as Other Income. Operating costs for the quarter were $382,240. The $17,092 loss for the quarter was the result of monetizing the gold we had previously purchased. We executed that transaction on July 16, 2004 and accrued the difference of $42,180 (loss) in the June 30th statements. We sold our first gold in July by delivering 3,000 ounces to an open spot deferred contract and netting $406.05 or $1,218,150. 2,400 ounces represented previously purchased gold that was monetized. We currently have about 800 ounces of gold and have open spot deferred contract at $403. No decision has been made to sell any further gold at this time.
To clarify ore on the leach pad: In transition from American Asphalt to Degerstrom, delays in the Air Quality permit for the new equipment resulted in ore not being loaded onto the leach pad because of no ability to operate the crushing/agglomerating plant. Since June 30, 2004 about 25,000 tons have been added to the pad and is also under leach which brings the total ore on pad to over 100,000 tons. Feed to the pad is at 225 tph, or 2250 tons per 10 hour shift and is consistent. The stockpile is nearly gone and daily mining is providing the feed. About a week's supply will remain in the stockpile as inventory to insure uninterrupted operations.
Further information regarding pending acquisitions, the AMEX listing and other business will be forthcoming as soon as available for publication.
Corporate & Investor Relations: Craig Moore 480.505.4040 Email: info@goldspring.us www.goldspring.us
Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based largely on the Company's expectations and are subject to a number of risks and uncertainties beyond the company's control, including but not limited to economic, competitive and other factors affecting the Company's operations, management team effectiveness, expansion strategies, available financing, market prices and recovery costs, government regulations involving the Company, facts and events not known at the time of this release, and other factors discussed in the Company's filings with the Securities and Exchange Commission. These statements are not guarantees of future performance and readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to update publicly any forward-looking statements