Patriot Gold Corp (PGOL)

[srm4u]

Mining in Arizona

The Southwest is the United States’ richest storehouse of metals and industrial minerals and is
likely to remain so for many years. Arizona ranked first in mineral production in the US in 2006 with
a production value of $6.7 billion according to preliminary unpublished figures of the USGS. Arizona
leads the Nation in copper and ranked 2nd in molybdenum and sand and gravel production. It ranks in
the top five in gemstones, perlite, silver, zeolites, and pumice. Additionally, Arizona produces, or has
produced, zinc, lead, beryllium, vanadium, uranium, tungsten, rare earths, manganese, coal, and at
least 18 varieties of industrial minerals.
In 2005, Arizona accounted for 62 percent of the U.S. copper production. The copper industry has
a $3.5 billion direct and indirect impact on the Arizona economy. Arizona’s two largest copper producers,
Asarco Inc., and Phelps Dodge also produce significant amounts of molybdenum, gold, and silver as
byproducts in the production of copper. Phelps Dodge’s Morenci mine produced 815 million pounds of
copper in 2006, it has the largest EW plant in the world, and is one of the world’s largest copper mines.
Exploration and development increased significantly, coincident with the strong metal prices. This
was especially true for copper and molybdenum as those commodities have recently been at record prices
and also for uranium reaching an all time high. A newly discovered porphyry copper deposit may be the
largest copper deposit in North America. Resolution Copper, a joint venture of Rio Tinto and BHP
Billiton, owns the deposit that has at least 1.25 billion tons of mineralization at 1.25 percent or better
copper. In 2007, Phelps Dodge will begin operating the first commercial scale copper concentration
pressure leach direct electrowinning plant at Morenci, where production of concentrates resumed in 2006.
Construction of the Safford Project began mid 2006 following approval by Phelps Dodge’s board.
Expenditures of $500 million are expected to build 2 pits, Dos Pobres and San Juan and a massive
leaching complex. When complete in the second half of 2008 the project will produce 250 million pounds
of copper a year. Quadra’s board approved financing of the Carlota copper leach project and construction
should begin in 2007.
Although gold takes a backseat to copper production, Arizona has produced over 16 million
ounces. American Bonanza Gold Mining recently completed a surface and underground drilling program
at Copperstone that defined a resource of over 330,000 ounces of gold.

Gold
Description: Arizona’s cumulative gold production exceeds 16 million ounces contributed from
219 metallic mineral districts. Twenty-six of those districts have produced more than 100,000 ounces and
46 have produced more than 10,000 ounces. Gold recovery has been from a wide variety of deposit model
types with the most important being epithermal (quartz adularia) veins, the more recently recognized
detachment fault-associated deposits, porphyry copper, and volcanogenic massive sulfide. Economic
deposits have formed during four widely diverse geologic periods: Proterozoic, Jurassic, Laramide and
Mid-Tertiary.

History:

Recent primary producers include:
Copperstone - produced 500,000 oz, McCabe
(Gladstone), Verdestone, Congress, and Gold Road, the last to operate, closed in 1998.

Resources:
A number of deposits with potential to produce a few hundred thousand ounces or more
have been awaiting a period of higher prices for their development to occur. These include Yarnell,
Newsboy, Moss, Mexican Hat, Tiger, Golden Eagle and Copperstone underground.

Current Activity:
Copperstone - American Bonanza completed a 40,000-meter drill program at
the detachment hosted Copperstone deposit and in February 2006 announced NI43-101 compliant
resource of 330,000 ounces of gold. In July a program was announced to test 10 geophysical and
structural step-out targets, zones that have the potential of adding significant new tonnage to the existing
mineralization. The initial drilling phase planned an estimated 75,000 feet of RC drilling in 50 holes. Six
of the targets tested returned results that warrant follow-up drilling. On a parallel path with the
exploration program, Bonanza has collected environmental, geotechnical, hydrological and metallurgical
baseline data to support mine permitting and project design. Bonanza plans to expand the mineral
resource before making a production decision.


Other properties:
Columbus Gold is
exploring four projects in western Arizona: Clara
Moro, Burnt Well, Silver District and Clanton H
The company’s exploration work and project
generation activities are carried out by Cordex
Exploration. Patriot Gold resumed drilling on the
Moss mine in the Oatman district. Further north in
the Black Mountains the Van Deeman was o
by Tonogold Resources. Teryl Resources optioned
the Gold Hill patented claims and conducted
reconnaissance sampling along fault structures. O
the predominately silver Hardshell property,
Wildcat Resources re-assayed cuttings and plans
drilling to confirm previous Asarco resources.

http://www.admmr.state.az.us/Publications/ofr07-24.pdf

Along the southern extension of the Walker Lane and south of Oatman lies the Copperstone Mine. The
mine was operated by Cyprus Minerals and produced 500,000 ounces of gold during the period 1987 to
1993. Total mine production was 6 million tons at a grade of 0.09 OPT gold. Gold recovery for the life of
mine was 89%. Following the mine closure in 1993, Cyprus reclaimed the tailings ponds and removed
the carbon-in-pulp mill. American Bonanza Gold Corp. acquired the mine in the 1990s and has recently
completed positive feasibility studies for extracting 46,000 ounces gold per year from reserves which
includes 256,000 ounces of gold in proven and probable reserves and 313,000 ounces of gold in inferred
resources. Permitting is expected to be completed in 2011.
American Bonanza Gold Corp. has also acquired prospective properties surrounding and including the
Oatman Amalgamated Mine in the Oatman district. This area is reportedly at the intersection of the
Gold Road and Tom Reed veins. Ongoing exploration efforts include deposit modeling using modern
techniques and proposed drilling campaigns.

http://www.patriotgoldcorp.com/projects.php