KELLOGG, Idaho, March 25, 2009 (GLOBE NEWSWIRE) -- New Jersey Mining Company (OTCBB:NJMC) today provided an update of its recent progress at the Golden Chest mine and its plans for future development, gold production and exploration.
During the fourth quarter of 2008, the North ramp was connected with the historic No. 3 level at a point that is 600 meters from the No. 3 portal. Near the North ramp intersection, the No. 3 level was found in good condition, although about 300 cubic meters of slimes (fine-grained rock particles) had to be pumped from the drift. During pumping, compressed air, water and discharge pipelines were installed to the south where the No. 3 level intersects the Idaho vein. At this point, the No. 3 drift was found to be caved near an old stoping area. The caved area is about 400 meters from the surface.
After assessment of the No. 3 level, it was decided by Company management that the quickest and least expensive approach to gaining access to its block of gold ore reserves on the Idaho vein is to drive a new adit parallel to the No. 3 level. This new adit would provide improved ventilation and a secondary escape route as well. The new adit would require about 400 meters of drifting, which is estimated to cost $700,000 and would take six months to complete. It would provide access to 231,000 tonnes of ore reserves on the Idaho vein that has an average grade of 5.08 grams of gold per tonne (gpt), which would feed the New Jersey mill for about seven years, at its current capacity, resulting in an annual production rate of about 4,500 ounces of gold. Cash costs are estimated to be about $630 per ounce.
Completion of the new No. 3 adit will be dependent on the Company's ability to raise funds through an equity placement, which minimizes shareholder dilution or the sale of a joint venture interest.
After analyzing geologic data and inspecting the old No. 3 workings, it appears possible to, at least, double the current Idaho vein reserve block. This would be done by drilling above, but primarily below the current reserve block. The current Idaho vein reserve block extends only 90 meters vertically below the No. 3 level. A series of six 250 meters holes drilled from the surface could potentially add 170,000 tonnes of gold resources on the Idaho vein if it persists at depth. An important benefit of a new adit would be as a platform for drilling in the northern part of the mine for additional high grade Katie and Dora-type oreshoots. The primary goal of the exploration program would be to prove up enough gold resources to justify increasing the New Jersey mill capacity or the construction of a larger flotation mill at the Golden Chest.
The Company has gained considerable knowledge about the Golden Chest vein system since acquiring the mineral lease from Metalline Contact Mines in 2004. Exploration and development work has included driving 500 meters of ramp, drilling 19 drill holes for a total length of 3,415 meters and mining 7,200 tonnes of ore, producing 1,400 ounces of gold. Based on the work completed, management has concluded that the exploration potential of the Golden Chest vein system is very good for finding additional gold resources.
The vein model being used includes the Idaho fault as the main conduit of gold-bearing hydrothermal solutions. The Idaho fault is a thrust fault located at the contact of two Prichard Formation units. Gold bearing veins formed along the footwall of the Idaho vein in a quartzite unit and in northeast splits from the north striking, west dipping Idaho fault. The vein splits are flatter than the Idaho fault and consequently they intersect the fault when followed downward. There are at least six known vein splits of which most have not been fully explored. Exploration planned includes underground drilling to explore the known splits and to explore down-dip on the Idaho fault to locate more vein splits and also footwall resources.
Currently, the Company is mining ore from a remnant pillar on the Katie vein and from a section of the recently found Clagett vein and shipping the ore to the New Jersey mill. In an effort to conserve cash, the Company has suspended development activities, which resulted in the laying off of one crew of three miners, with a single crew of three miners focused on mining the Katie and Clagett veins at a rate of 400 tonnes per month. The tonnage of ore available from these veins is limited as compared to the Idaho vein reserve block. An internal ramp is being driven in the Katie vein area to investigate a jackleg hole that intercepted 36.4 gpt gold across 1.2 meters at a distance of 6 meters from the main ramp.
The Company's Concentrate Leach Plant (CLP) in Kellogg is performing at design criteria for the Golden Chest concentrate, although more fine tuning is needed to maximize gold recovery in the electorwinning cell. Several batches of gold-silver dore' have been produced by the plant and sold.
New Jersey Mining Company is involved in exploring for and developing gold, silver and base metal resources in the Coeur d'Alene Mining District of northern Idaho. The Company has a portfolio of mineral properties in the Coeur d'Alene Mining District, including the Toboggan Project, which is a gold exploration joint venture with Newmont Mining Corporation, the Niagara copper-silver deposit, the Golden Chest mine, the New Jersey mine and mill, and the Silver Strand mine.
This release contains certain forward-looking statements within the meaning of the Federal Securities Laws. Such statements are based on assumptions that the Company believes are reasonable but which are subject to a wide range of uncertainties and business risks. Factors that could cause actual results to differ from those anticipated are discussed in the Company's periodic filings with the Securities and Exchange Commission, including its annual report on Form 10-KSB for the year ended December 31, 2008.
Further information about New Jersey Mining Company and its properties can be found at the company's website at www.newjerseymining.com.