New Jersey Mining Company Evaluates Potential for 20,000 Oz/Year Gold Production at Golden Chest Mine & Possible Spin-out of Rare Earths Subsidiary to its Shareholders
COEUR D'ALENE, Idaho, March 5, 2021 (ACCESSWIRE) -- New Jersey Mining Company (OTCQB: NJMC) (“NJMC” or the “Company”) is pleased to provide a “big picture” update, including a preliminary discussion in regard to up-listing to a senior exchange in concert with our plans to increase production at the Golden Chest Mine and the potential for the spin-out of its rare earth subsidiary to shareholders.
NJMC President and CEO John Swallow stated, “As business owners, fellow investors and community stakeholders (and substantial NJMC shareholders), we believe it is important to understand how or what a person (or company) thinks, especially with regard to anticipating and adjusting to the multitude of macro and micro inputs. As discussions continue to evolve (and subject to change), and as the initial results of our drill program are received, we felt that communication from management in regard to the various paths being contemplated would be appreciated – such as a recap and possible positioning of our Rare Earths subsidiary, potential for increased gold production and eventually working toward a senior exchange listing.”
CONCEPTUAL PLAN FOR UP TO 20,000 OZ/YR GOLD PRODUCTION AT GOLDEN CHEST
Conceptual Plan – Preliminary Economics
Preliminary internal estimates and the conceptual plans are based on firsthand corporate experience with development, mining, exploration, milling and other knowledge gained from NJMC operations. Budgeting for personnel, equipment, and underground development have been considered in this evaluation. Subject to adjustments, the company is working with preliminary AISC estimates in the $1,100/ounce - $1,200/ounce range for gold, at a 20,000 ounce/year run rate.
Conceptual Plan – Preliminary Capex
The Company is developing a plan to build a 360 tonne per day (tpd) flotation mill at the Golden Chest Mine in Murray, Idaho in order to increase gold production up to 20,000 ounces per year. Budgetary cost estimates are made for the major items in this plan including mine development, construction of the mill, land acquisition, resource in-fill drilling at the mine, and exploration drilling at the Alder Gulch property ¸ two miles west of the mine. Current trucking of ore to the existing New Jersey mill is roughly $12/tonne. At just 50,000 tonnes per year, the potential annual savings from just this one component is estimated at $600,000.
Expansion of the existing underground mine would be undertaken with production coming from the Skookum Shoot of 50,000 tonnes per year and the Paymaster Shoot of 36,000 tonnes per year. An additional 30,000 tonnes per year will be sourced from an existing surface stockpile. Currently, the Skookum is the only area in production. Gold grades in the Skookum are expected to be about same as they are now at 6.5 gram per tonne (gpt) gold ¸ while the Paymaster gold grade will require more drilling to determine accurately, the existing drilling indicates two narrower, but higher-grade veins with a diluted grade (2-meter mining width) of 8.5 gpt gold. The Paymaster veins are separated by an intrusion of quartz monzonite (15 to 30 meters thick) which is where the access ramp would be placed. Finally, the surface stockpile grade is well established from blasthole sampling at 1.09 gpt gold.
NJMC’s 2021 drill plan is based on its “Deep Rooted” ore shoot model. Recent deeper drilling at the Golden Chest is showing deeper and better grade continuity of the Joe Dandy and Paymaster shoots ¸ while Skookum core logging is still underway ¸ core holes in this area also intercepted the mineralized Idaho Fault. Initial positive
results and preliminary analysis
have accelerated the potential for a significant increase of gold production per
year at the Golden Chest and the evaluation for a new mill at the Golden Chest.
New Jersey Mining Company ? 201 N. 3rd Street ? Coeur d’Alene, Idaho 83814
Using these tonnages, gold grades, and metallurgical recoveries from current milling data, an annual production of approximately 20,000 ounces is indicated.
Table 1 below lists the preliminary budgetary capital cost estimates for the conceptual plan to increase annual production at the Golden Chest up to 20,000 ounces per year. The costs are preliminary in nature and detailed engineering is still required to determine the final costs, with some costs listed coming from the mine cost handbook.
This information is for discussion purposes only to allow for better understanding of management and
other corporate goals. The timing of capital expenditure for a new mill and mine expansion will likely occur in
phases while remaining flexible with the disposition of some non-core assets and an eye on shareholder dilution.
Table 1
Capital Item Mine Development
Main Access Ramp Ventilation Raise Mining Equipment
Flotation Mill
Paste Backfill Plant
Land Acquisition (in-process) Electrical Service Upgrade Golden Chest Infill Drilling Murray Gold Belt Drilling Total
Drilling Highlights at the Golden Chest
$ USD
$ 3,600,000 $ 800,000 $ 1,500,000 $ 6,000,000 $ 2,000,000 $ 1,500,000 $ 1,000,000 $ 2,500,000 $ 1,500,000 $20,400,000
• Six identified ore shoots - Katie Dora, Klondike, Skookum, Golden Chest, Paymaster and Joe Dandy.
• 2020/2021 drill program is testing down-dip extensions of the six recognized ore shoots. Focused on
preliminary production/mine-life potential of each individual ore shoot.
• Drill program began with high-grade intercept of 0.2 meters of 74.6 grams per tonne gold (gpt), true
thickness, in the Katie Dora.
• In the Paymaster, a significant additional vein assaying 104 gpt gold over 0.4 meters was encountered in
hole GC 21-184. This intercept is located 47 meters above the Idaho Fault.
• Also, from the Paymaster, GC 21-184 intercepted 1.5 meters of 20.1 gpt gold (including 0.9 meters of
26.7 gpt gold) in the upper vein and 1.4 meters of 3.8 gpt gold in the lower vein.
• GC 20-183 (Paymaster) intercepted 0.9 meters of 14.7 gpt gold in the upper vein.
• Followed by a new discovery in the Joe Dandy, the southernmost ore shoot, with 7.3 meters that assayed
11.5 gpt gold (including 2.3 meters of 19.5 gpt, true thickness).
• Current underground production is from Skookum Shoot – growth from 5,000 ounces to 10,000+/-
ounces per year production run rate from the Skookum over next 12 months.
New Jersey Mining Company ? 201 N. 3rd Street ? Coeur d’Alene, Idaho 83814
NJMC’s RARE EARTH ELEMENT (REE) SUBSIDIARY
Company management believes that NJMC’s REE holdings represent a significant unrealized value for shareholders. And while concrete plans are not yet in place, the company is evaluating a spin-out of its REE subsidiary to NJMC shareholders, possibly at or near the timing of up-listing to a senior exchange.
• Permitting underway for drill programs at Diamond Creek and Roberts.
Diamond Creek REE Project
The REE bearing veins of the Diamond Creek area are on the short list of the well-recognized and studied occurrences in the United States.
In 1979, M.H. Staatz, of the U.S. Geological Survey (USGS) estimated an overall probable resource at Diamond Creek of approximately 70,800 metric tonnes of total rare-earth oxides, using an average grade of 1.22 percent. Reported sample assays show REE oxide contents ranging from 0.59 to 5.51 percent. Additionally, three samples cut across one of the larger veins were assayed for gold, and contained 0.5, 2.4 and 11.9 grams per tonne (0.017, 0.07, and 0.348 ounces per ton).
The Diamond Creek REE Project covers approximately 421 hectares (1,040 acres) and is comprised of 52 unpatented mining claims. It is located in the Eureka Mining district, approximately 13 kilometers (8 miles) north-northwest of the town Salmon, Idaho.
Roberts REE Project
Recent sampling by Company geologists returned grades in excess of 12% combined Rare Earths Elements, with gold values up to 8.8 grams per tonne and Niobium as high as 0.50%.
At the Roberts, one carbonatite occurrence can be found in a northwest trending seam which measures approximately 400 meters long and 90 meters wide. The second occurrence is a small carbonatite plug measuring about 200 meters in diameter. Studies conducted by A.T. Abbott (1954) and A.L. Anderson (1958) from the Idaho Geological Survey (IGS), and E.P. Kaiser (1956) with the U.S. Geologic Survey (USGS) pioneered recognition of these unusual deposit types in the Mineral Hill District.
The unusual carbonatite seam and intrusive plug occurring on the Roberts property are characterized by an impressive REE concentration. Abbott reported cutting a 2.5’ sample across the Roberts lode which returned 21.5% combined rare earth oxides and thoria. NJMC personnel believe that Rare Earth Elements like Neodymium, Praseodymium and Samarium occur on the property in abundance.
The Roberts REE Project is comprised of 12 unpatented mining claims covering an area of approximately 219 acres. This project is located within the Mineral Hill Mining District, approximately 30 miles northwest of the town of Salmon, Idaho.
• NJMC’s Rare Earth Element properties resources are already listed as part of the United States’ Rare Earth Element national inventory, as identified in IGS and USGS publications.
• The presence of “at-risk” rare earth elements such as Neodymium, Praseodymium, Dysprosium, Yttrium, and Niobium have been confirmed through NJMC’s sampling at the Diamond Creek and Roberts properties.
At Diamond Creek, the gold and REE’s occur within the same veins, but it is
not clear if the gold is genetically related to the REE mineralization. Some of the mineral pulses have gold,
thorium, uranium, niobium, yttrium and REE’s. Niobium and gold are possible by-products that would add
greatly to the economics of Diamond Creek.
The REE mineralization at Diamond Creek is found in quartz veins
over a large area approximately 3.2 km (2 mi) long and 0.8 km (0.5 mi) wide.
New Jersey Mining Company ? 201 N. 3rd Street ? Coeur d’Alene, Idaho 83814
The Principal Rare Earth Elements Deposits of the United States – A Summary of Domestic Deposits and a Global Perspective – USGS Scientific Investigations Report 2010-5220
CONCLUSION AND COMMENTARY
Mr. Swallow concluded, “We realize that there is a lot to ‘unpack’ in this press release, however we believe it is important to have an understanding of the Company. In addition to the above-mentioned conceptual plans, management is also evaluating up-listing to a senior exchange in an effort to increase the Company’s exposure to mainstream equity investors, portfolio managers, and other groups. Because the company and operations have shown substantial growth and operational viability, we have a good understanding of how a phased approach fits into the more modest capex requirements of an established producer. NJMC is a small operating company working to become a larger company. There are no guarantees in this business - or any other - and everything is subject to change. We also realize that discussing potential plans/thinking is somewhat unconventional, however we find it easier and more honest to converse with folks if we are both substantially on the same page. This press release discusses the thoughts of management and hopefully allows people to analyze whether or not NJMC aligns with their own investment criteria. New Jersey Mining Co. has been (and will be) an example of building as you go and has experienced success where others have failed. There will always be choppiness in our results on both sides of the ledger and I would expect more of the same as our ‘up and to the right’ path continues.”
Quality assurance/quality control
All of the samples were analyzed by American Analytical of Osburn, Idaho, an ISO certified laboratory. Samples were analyzed using lead collection fire assay with a gravimetric finish. A series of known assay standards are submitted with each drill hole as part of a quality assurance-quality compliance program.
Qualified person
NJMC's Vice President, Grant A. Brackebusch, P.E. is a qualified person as such term is defined in National Instrument 43-101 and has reviewed and approved the technical information and data included in this press release.
New Jersey Mining Company ? 201 N. 3rd Street ? Coeur d’Alene, Idaho 83814
