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Copperstone Property Summary
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Copperstone Property Important Information In October 2000 Mine Development Associates (MDA), an independent mining engineering firm based in Reno, Nevada, was engaged to review the project and produced the "Geologic Report for the Copperstone Gold Property". This report in its entirety is available for review on the SEDAR website (www.sedar.com). The MDA report reviews and contains a Preliminary Assessment completed by MRDimg/Golder Associates (then entitled "Copperstone Gold Project - Scoping Study") in February 1999. It is MDA's opinion that the presently defined gold resource in the C and D zones could be overstated. MDA does not have an opinion of the resources of the A and B zones because they were not reviewed by MDA nor are the focus of the current work programs. MDA believes a substantial and defensible estimate of Measured and Indicated resources requires both detailed geology and infill drilling, both of which are currently underway. In MDA's opinion these programs should be successful. At that point, in MDA's opinion, there should be the ability to better define location, grade, and distribution of gold. The Company is currently engaged in drilling programs to acquire the data to estimate a resource with greater confidence. When the drilling programs are complete, it is the company's plan to sponsor an updated Report. MRDI Canada, (then a division of H.A. Simons Ltd.), now a subsidiary of AMEC plc, (�MRDI�) was retained by the Company during 1999 to assist in a scoping level evaluation of an underground mine at Copperstone, as has been previously announced. Exploration drilling on the project outlined four zones of mineralization defined as the A, B, C and D zones with gold mineralization occurring principally within the Copperstone Fault. As has been previously announced, the total resource estimate for the C and D zones using capped grades is comprised of an Indicated resource containing 892,000 tons grading 0.32 opt Au (285,700 ounces of gold) and an Inferred resource containing 1.19 million tons grading 0.35 opt Au (423,000 ounces of gold). Although these resouces were estimated prior to the implementation of NI-43101, the company believes that these resources are comprable to NI-43101 Indicated and Inferred resources (see below). As has been previously announced, the Preliminary Assessment evaluated the underground mine development of only the C and D zones, and estimated a total resource for the C and D zones of 2.1 million tons at an average uncut grade of 0.58 Au opt, containing over 1.2 million ounces of gold. The uncapped resource was estimated by MRDI for comparison purposes only, providing an estimate of the affects of capping the gold grades. MRDI did not separate Inferred and Indicated resources in this uncapped estimation. Within the above mentioned Indicated Resource and Inferred Resource, MRDI estimated a combined resource for the material that they considered available to mining - that is to say, the material that can be accessed from one decline tunnel starting at the north end of the extisting open pit. This decline has been completed to access the high grade D-Zone. This estimate utilizes diluted grades and recoverability parameters to estimate the portion of the resources that MRDI included in the conceptual mine design plan. MRDI estimated that portion of the resources to be 827,400 tons at a cut and capped grade of 0.56 opt Au (459,500 ounces Au). While MRDI used descriptive language to accurately provide a definition of the resource estimates completed by MRDI that were adequate at the time the preliminary assessment was completed, these terms are no longer permissible under NI-43101. To avoid misinterpretation by the reader, the company here states that resources estimated by MRDI are not mineral reserves, are based on conceptual mine modeling, and despite the very high grades present at Copperstone have not yet been shown to be economically viable through preparation of a NI-43101 report and other studies that will be necessary. To study this conceptual mine design plan, economic mining cut-off grades were based on a gold price of $300 per ounce, a milling recovery of 90% and estimates of operating costs were determined for each zone and varied from about 0.25 to 0.30 opt Au. A planned daily processing rate of 500 tons per day was used. The resources available for mining are based on the material within a geologic grade envelope of 0.10 opt Au and greater, and having overall diluted grades greater than the estimated cut-off grades. Each zone has been factored for 95% mining recovery and 10% mining dilution at a grade of 0.08 opt Au. Material excluded from the mining plan includes that with diluted grades less than 0.25 opt Au, totaling about 474,000 tons at a grade of 0.183 opt Au, and that in the hangingwall zones which is based on limited drill hole data and totals about 105,000 tons at a grade of 0.998 opt Au. The MRDI report was completed prior to NI43-101 and was prepared by MRDI Canada, an independent mining engineering consulting firm. The report was prepared to industry standards and is relevant and reliable today, as it was in 1999. MRDI did not independently verify the sample data. The MRDI resource estimate is based on a geological model provided by the Company and an inverse distance weighting to the power 3 block model (IDW3). Gold grades were capped at 2.5 opt Au in the C zone and 4.7 opt Au in the D zone. A 0.00 opt Au block cut-off grade was used for the total resource estimate. The tonnage factor applied was 10.7 cu.ft/ton. The assay database supplied to MRDI contains 30,391 assays from 586 exploration and ore outline drill holes completed during the period 1980 to 1998. A subset of this database containing 71 drill holes with 253 associated assays has been used in this preliminary assessment to develop the geological and resource model of the C and D zones in the Northwest High Grade Zone. According to MRDI, �The Copperstone Gold Project Geological Resource�has been classified into Measured, Indicated and Inferred Resources based upon the level of confidence according to the proposed TSE guidelines using the drilling grid spacing and continuity of mineralization as determined through the geological and geostatistical review of the data.� Management is of the opinion that these classifications are materially in compliance with NI-43101. These mineral resources are not mineral reserves and do not yet have demonstrated economic viability � demonstrating such economic viability is a priority for the company. The MRDI report is a "preliminary assessment" and is preliminary in nature; it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized. The Copperstone Project is the site of previous, recent, modern, open pit gold mining. For that reason, all environmental permitting, legal, title, taxation , socio-political, and marketing issues at the site have been successfully overcome in the recent past. The site has recently been permitted for a much larger operation that any potential underground high grade mine that will be constructed in the near future. Title is held through a renewable 10 year lease with the owner and is in good standing. No legal issues that appear to compromise the potential of the property are known. The pertinant taxation system is favorable to mining. Arizona has hosted a very large modern mining industry. The local socio-political climate appears favorable to development of a gold mine. The locality is remote, rural, and pro-jobs. Gold, the product of a contemplated mine, is a very liquid product that can be marketed very easily and directly. The company has not done the work necessary to verify the classification of the resources currently present at Copperstone. The company is not treating these resources as NI-43101 defined resources. The company is currently engaged in drilling programs and studies with the objective of estimating NI-43101 resources. The historical estimates are not mineral reserves and do not have demonstrated economic viability and should not be relied upon. As has been previously announced, the qualified person for the MDA report is Steve Ristorcelli, Registered Professional Geologist, Certified Professional Geologist, employed by Mine Development Associates, an independent Consulting Engineering Firm, whose address is 210 South Rock Blvd, Reno, Nevada 89502. The qualified person for the MRDI report is not specifically stated due to the report pre-dating the implementation of NI-43101. The site visit to Copperstone was conducted, and the report was jointly authored by Tim Maunula, an employee of MRDI late in 1998. The qualified person for the various news releases that may at times update this website is Gregory French, CPG#10708, a Qualified Person as defined in Canadian National Instrument 43-101. Mr. French is an independent Consulting Geologist based in Reno, Nevada. Copperstone Underground Channel Sampling Important Information As discussed above, on May 5, 2003, the company announced that the underground decline at the Copperstone Project in Arizona has encountered very high gold grades in the initial target: the southern portion of the D-Zone. North of gridline 1,047,470 North, a total of 42 channel samples were collected from face and rib exposures during the mining of eight rounds covering 80 linear feet. The channel sampling is designed to characterize the mineralization of various rock types. All samples contain gold, and sample values range to a high of 11.5 ounces per ton (�opt�) gold and average 1.2 opt gold; a complete listing of the assay results is provided as part of this news release, in the table below. Significant multi-ounce channel samples include 4.5 feet grading 9.1 opt gold, 1.5 feet grading 11.5 opt gold, 6.4 feet grading 4.1 opt gold, 9.5 feet grading 4.1 opt gold, 2.1 feet grading 3.6 opt gold, 2.1 feet grading 3.2 opt gold, and 5.1 feet grading 2.9 opt gold. Underground channel sampling confirms the gold mineralization in the initial drill hole within the D-Zone encountered to date by the underground development. Drill hole C96-19 is a core hole drilled from surface that lies within the D-Zone, about 80 feet North of the southern margin of the D-Zone. Drill hole C96-19 represents Bonanza�s initial target within the D-Zone and contains 10 feet grading 5.3 opt gold, as previously announced. Channel sampling from the same mining round that exposes drill hole C96-19 in the back of the underground workings (about 5 feet south of drill hole C96-19) returned values of 9.5 feet grading 4.1 opt gold, 4.5 feet grading 9.1 opt gold, and 4 feet grading 1.9 opt gold � which confirms the very high gold content of drill hole C96-19, with locally higher grades. As expected, routine channel sampling south of gridline 1,047,470 North (south of the D-Zone) did not return significant gold assays as this area lies outside of the D-Zone target area. A comprehensive panel sampling program has commenced to characterize the gold grade of the mineralized horizons, and design of an assay protocol tailored for very high grade samples has begun, which will examine the performance of metallic screen fire assays, multi-assays, and/or large assay charges up to 5 assay ton charges. Future sampling will focus on panel samples using the very high grade assay process. The underground workings at Copperstone now extend over 1,800 feet northward from the portal site at the northern end of the Copperstone Open Pit and provide access to the D-Zone mineralization. Intensely sheared, altered and replaced rock has been encountered in the decline within the D-Zone. Alteration is consistent with alteration visible in the very high grade intervals in the core holes previously drilled from surface which currently define the D-Zone. Surface drilling indicates that the Copperstone Fault in the D-Zone is thought to be from ten (10) to forty (40) feet thick; none of the channel sampling to date tests the true thickness of the target zone. The decline has been designed to intersect the Copperstone Fault in the D-Zone at the mineralized interval within drill hole C96-19. In other areas, the high grade portions of the Copperstone Fault may be above or below the decline and will be defined by underground core drilling. A cross cut was recently driven westward to establish an underground drill station. An underground core drilling rig has been mobilized to Copperstone. Extensive core drilling from underground will locate and define the grade profile of the Copperstone Fault in the D-Zone and has commenced. Subsequent underground core drilling, drifting, cross-cutting and sampling will provide detailed assay and geologic data describing the D-Zone. This detailed data is planned to be sufficient to refine the D-Zone resource estimation into reserve-level definition. This work comprises the next stage of underground work at Copperstone, and has begun. A summary of assay results (as previously announced) from the channel samples is as follows, presented generally from North to South,: Channel Sample # Sample Length (feet) Gold Grade (opt Au) Channel Sample # Sample Length (feet) Gold Grade (opt Au) North end of sampling, adjacent to DH#C96-19 9077 9.5 4.07 1718 2.7 0.41 9078 4.0 1.90 1719 2.8 0.55 9079 4.5 9.09 1720 2.8 0.04 1761 2.1 0.15 1716 1.7 0.20 1759 5.1 2.86 1721 0.5 0.14 1758 2.7 0.34 1762 2.1 3.58 1754 5.6 0.31 1740 1.5 11.54 1756 0.5 0.06 1741 2.5 0.58 1757 2.6 0.07 1742 1.0 0.08 1732 1.8 0.02 1743 1.6 0.01 1733 1.4 0.01 1710 6.4 4.12 1734 2.0 0.01 1696 2.7 0.15 1735 1.4 0.42 1695 2.6 0.29 1736 1.1 0.17 1691 2.9 0.06 1737 5.0 0.07 1692 3.0 0.27 1738 3.1 0.13 1694 2.8 0.03 1739 3.2 0.05 1693 3.1 0.09 1729 1.9 0.02 1687 4.1 0.03 1728 2.2 2.68 1688 1.8 0.23 1727 4.6 0.93 1689 2.8 0.30 1717 2.1 3.22 1686 1.1 0.03 South end of sampling: 1,047,470 North The Copperstone gold mineralization occurs within a package of sedimentary and volcanic rocks, in northwest striking, moderate to shallow dipping fault zones, principally the Copperstone Fault. Intensely sheared, altered and replaced rock characterizes the Copperstone Fault in the vicinity of the D-Zone. Alteration consisting of intense hematite and magnetite replacement, chloritization and silicification has been observed in the Copperstone Fault underground and is consistent with alteration visible in the very high grade intervals in the core holes previously drilled from surface which currently define the D-Zone. Gold mineralization is restricted to these fault zones, with little to no gold mineralization present in the wallrocks. Future exploration and development efforts will target these mineralized faults to follow up along strike and dip from the current results and previously drilled mineralization. Mining services were provided by a mining contractor, Merritt Construction Company of Kingman Arizona, under direct supervision of Bonanza personnel. The current heading is designed to be 11 feet wide by 12 feet high. The sampling and assaying were conducted by Bonanza personnel under the supervision of Gregory French, CPG #10708, a Qualified Person as defined in Canadian National Instrument 43-101. The channel samples were collected by Bonanza personnel at the face of each mining round, and were selected on a geological basis to characterize the gold mineralization associated with various rock types, alteration types and structural horizons. Because the channel sampling was designed to characterize the gold mineralization of various rock types, some samples were collected specifically to confirm that some particular rock types do not contain gold. The channel samples were collected at assorted orientations, and generally are perpendicular to the feature characterized. Because the Copperstone Fault dips gently to the east, many channel samples were collected from a near vertical channel. The channel samples average 2.8 feet in length, with a minimum of 0.5 feet and a maximum length of 9.5 feet. Sample sizes range between 10 and 20 pounds, averaging 15 pounds. True thickness of the Copperstone Fault at the D-Zone is thought to be from ten (10) to forty (40) feet thick from surface drilling, and none of the channel sampling to date tests the true thickness of the target zone. Approximately five samples were collected from the face and rib of each mining round (predominantly the samples were collected from the face). The general spacing of samples is as follows: approximately five samples were collected at each face, and spacing between the mining faces averages ten feet. The channel samples were bagged, labeled and tied at the Copperstone project site by Bonanza personnel. Reference samples for each interval were collected and stored in plastic bags. Geologic information was recorded on standardized sample description forms which included color, rock type, alteration, mineral species and abundance. Samples were collected at the end of each day and stored in a secure facility at the Copperstone project site. Two or three times weekly Bonanza personnel transported the samples to America West Airlines� airfreight desk at the regional airport at Lake Havasu City, Arizona. America West Airlines transported the samples to the airport in Reno, Nevada. There, representatives of American Assay Laboratories (AAL) in Sparks, Nevada received the samples and took custody of the samples. AAL is ISO / IEC 17025 certified and has successfully completed Canadian proficiency testing (CCRMP). At the AAL laboratory, the channel samples were dried, crushed to �10 mesh, pulverized to �150 mesh, split to 1,000 gram pulps, fire assayed for gold and silver using 1- and 2-assay ton fire assay with a gravimetric finish. All samples greater than 0.100 opt, standards, and blanks were submitted to additional labs for verification. A total of 42 channel samples were sent for assay, and a total of 75 additional check assays were performed on these samples (for a total of 117 individual assays for these channel samples); the very high grade samples were thoroughly checked. An additional routine 27 duplicate, standard and blank assays were performed. Check assays were submitted to BSI-Inspectorate, Sparks, NV and Chemex Labs, Sparks, NV for 2-assay ton gold analysis. Both labs are ISO 9002 certified. AAL or Bonanza personnel delivered the samples to the check labs. | ||||||||||||
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