The Montana Garnet Mine project was valued by Behre Dolbear in March of 2013 at $25,000,000 and purchased by Garnex Gold for $4,000,000 and a nominal royalty. A copy of their 120-page analysis is available upon request. www.dolbear.com
Prior to 1941, the property had 7 producing gold mines. The producing mines were shut down pursuant to War Production Board Limitation Order L-208 because gold was not a strategic metal for the World War II effort.
Historic production from placer and underground mining is in excess of 1.5 million oz. of gold.
Making the Garnet Mining District, in which GARNEX’S Garnet Mine is located, the third most productive gold mining district in the state of Montana.
In addition to the funds to be expended by Garnex for further exploration and underground development to gain access to proven reserves, there was in excess of $12,000,000 expended since 1988 by two previous operators before the property was purchased by Garnex Gold.
There have been more than 62,000 feet of drilling conducted to date. Pegasus Gold drilled 49,350 ft. from 1989 to 1990. Additional drilling in from 2008 to 2010 totaled 13,200 ft. in 2008, 21,840 ft. in 2009 and 34,858 ft. in 2010.
A mineable reserve consisting of 86,000 tons with an average grade of 0.40 opt is available to initiate production and contains an estimated 34,000 oz. of gold.
Garnex will undertake additional confirmation core drilling to document an additional estimated 200,000 oz. of inferred gold that has been indicated by prior drilling programs. This confirmation drilling will be focused on the Nancy Hanks vein system.
It is management’s opinion that based on previous drilling and other exploration methods, it is highly possible that the property could contain up to a 1,000,000 oz. of gold, with credits in silver and copper. The four historically-productive vein systems are open on each end and at depth. As of this date there has been no historical mining conducted below the 500 ft. oxide zone. There has only been one drill hole below 500 ft., which intersected the Nancy Hanks vein at 925 ft. and reported a favorable mining width and an average of .25 opt of gold.
Projected probable ore is in excess of 1,000,000 oz. of gold and there has been no exploration or development work undertaken below 500’. Similar mining operations in comparable rock types in the Coeur d’ Alene mining district are down over 9,000 ft. As of this date, there has been 14 different gold-bearing mineralized zones defined by previous drilling. All prior drilling, trenching and geophysical surveys have been integrated into Vulcan 3-D mine-modeling software for the express purpose of helping define additional future core-drilling targets. There are four primary gold-bearing structures or vein systems defined on the property:
- the Nancy Hanks vein
- the Willie vein system
- the Lead King vein system
- the Tostman vein system
There is a defined core-drilling plan in place to continue confirmation drilling on the Nancy Hanks structure. This defined core-drilling program will consist of 21 additional drill holes totaling approximately 6,000 ft. This drilling will be along the strike of the Nancy Hanks vein and undertaken to expand the known reserves and assist in our forward looking mining plan.
The Nancy Hanks portal and a 13’ x 12’ decline has been driven to a length of 387 ft. at a decline angle of 15 degrees. This decline will be extended to gain access to the Nancy Hanks and the Red Marble ore bodies. The company plans to undertake additional underground drilling in the future.
The Nancy Hanks surface support and infrastructure consists of:
- 45′ x 60′ (2,700 sq.ft) metal building mine shop;
- power station;
- assay office;
- managers and engineers office;
- five cabins for staff and visitors;
- miners tag-in and change area; and
- 36′ X 120′ (4,320 sq. ft) metal building for geologist office, core and sample storage and equipment storage.
A mill design and construction plan has been completed.
Two metallurgical studies have been completed by: Dawson Metallurgical Laboratories, a division of FL Smidth, and Camp Dresser & McKee Inc., both of whom are based in Salt Lake City, Utah.
There are two custom mills located within trucking distance of the Garnet mine. The Golden Sunlight Mill owned and operated by Barrick Gold, Inc. is located Whitehall, MT and the Contact custom mill is located in Philipsburg, Montana, owned and operated by Contact Mining Company, Inc. Access to these custom mills will ensure potential revenue without Garnex having to initially construct its own concentrator facility. Contact Mining Company has agreed to initially process up to 6,000 tons a month or 200 tons a day. The company’s objective is to mine ore that has an average ore grade of .4 oz. per ton or $600 gross per ton based on the spot price of gold at $1,500, spot including silver and copper. Production of 200 tons per day results in a gross income in excess of $100,000 per day. Subject to receipt of capital, management is of the opinion that the mine can be in production in 6-7 months. A detailed 21 week engineering and operating plan is ready to implement.
A complete 3-D geological modeling and mine design plan using Vulcan software by Maptek has been finalized consisting of over 7,000 files. This includes a comprehensive production plan. https://www.maptek.com/products/vulcan/ Estimated cost to replicate over $250,000.
Garnex has two Small Miner Exclusion Statements (“SMES”) in place and approved to place Garnex in position to initiate both underground development work and production. The SMESes are recognized by the State of Montana and allow for surface disturbances of 5 acres each. One will be utilized at the Nancy Hanks mine and the second one will be used in the development of the Willie mine, which is located on the Free Coin patented claim under lease to Garnex with option to purchase, and five unpatented claims held by Garnex.
The application for a full Operating Permit, to be submitted to the State of Montana Department of Environmental Quality, is 90% drafted and will be ready for submission by a consulting geologist retained by the company within 60 days at an estimated cost of $12,000. An approved Operating Plan will allow Garnex to conduct its mining activities without an acreage limitation within the Plan area.
Garnex has a seasoned/proven management team and an outstanding group of professional consultants ready to assist. Biographies available under “Team“.
Garnex intends to retain Wood PLC, a large Consulting, Engineering and Construction Company that employees 60,000 individuals worldwide. Wood will be engaged to:
- provide technical expertise and engineering services
- assist with dealing with all of the federal and state regulatory agencies; and
- at the appropriate time, design and construct a concentration facility near the mine. www.woodplc.com
There is an early 43-101 independent report and nine major geological and engineer reports and a complete library dating back to 1890s. All of these reports are available upon request. This report is in the process of being updated by CDM Smith https://www.cdmsmith.com/en
There has been a complete financial projection done that extracted costs from the Maptek mine plan and then inserted into a three-year spread sheet. This includes a matrix that illustrates project pre-tax profits in a matrix analysis that is tethered to variable prices of gold and ore grade.
Mine Development and Production Plan
The Company has 7,000 files that utilize Vulcan Sub-Surface 3-D geologic modeling software (“Vulcan”). All historic and current drill data has been inputted to facilitate future core-drilling programs and mine planning in anticipation of development and future production. WGM Engineering, of Missoula, Montana conducted a Lidar air survey of the project area. This survey has a tolerance of 2’ or less and has provided Garnex with an extremely accurate and current topography, along with aerial photography of the Garnet Property that has been imported to Vulcan. Many of the historic mine workings, roads, and various other features in the area have been digitized and imported into Vulcan. These historic workings help indicate the potential location of veins and structures mineralization with gold, in addition to mine-planning activities. Using all available data, Vulcan is being used to continue to create mineralized material zones of interest for further define exploration targets, mine development plans, ore reserve reports, mine production planning and geologic mapping.
The high-grade zone identified in the Nancy Hanks vein appears to be one of the best targets for initial mine development. The Company has completed a mine plan for this mineralized zone. The potential for this mineralized zone to continue to the northwest and tie into the Tostman zone is consistent with the area’s geological model. The potential strike length of this structure could exceed 2,000 feet. Exploration drill data at both ends of this structure have resulted in the preliminary definition of mineralized material that may be within economically-mineable grades.
The Lead King/Red Cloud vein system lies approximately 600 feet north of the Willie vein system and it dips more shallowly than the Willie vein at approximately 30-35 degrees. Historic reports and maps available to the Company indicate continued mineralization below the old workings. The Company’s consultants have determined the bottom of the old workings to be at about the same elevation as the upper portion of the Willie vein. The company has completed an initial mine plan for the Willie vein. The plan indicates that both the Lead King vein and the Willie vein could be developed from the same access. The Company anticipates permitting and drilling nine additional core holes to determine the continuation of this structure below the lowest level mined historically. Infill drilling will follow if significant mineralization is encountered during the initial program.
|Hole Type||Hole ID||From||To||Intercept||Grade OPT Au|
|Nancy Hanks Drilling|
The below are excerpts from a report prepared by structural geologist Dr. James Sears, a Professor of Geology at the University of Montana.
Prior exploration drilling programs documented a potential 70,000 ounces of economically recoverable gold reserves in the Nancy Hanks vein system and another 16,000 ounces in the Willie vein system. These are sufficient volumes to begin production with underground lode mining. The veins average 5,700 ounces of gold per 100 feet of strike-length for their upper 500 feet. The proven reserves represent, however, only a small fraction of likely gold resources in the district.
The drilled reserves constitute less than 1/10 of the mapped strike-lengths the Nancy Hanks and Willie vein systems and at most include only the upper 500 feet of those structures. Drilling in the Tostman claim to the west, and International claim to the east, while not spaced closely enough to define reserves, intersected the continuations of the Nancy Hanks vein structure with gold values consistent with our proven ore blocks.
Mapping of five sister gold-quartz veins has been accomplished between the Nancy Hanks and Willie veins. These historically-mined veins – the Cascade, Mountain View, Tiger, Grant-Hartford, and Lead King – sub-parallel the Nancy Hanks and Willie veins, and are spaced from a few hundred to a thousand feet apart. Geologic analysis and historic mining records indicate that these veins share similar grades, sources, mineralogic textures, trends, and structural habits. Historic mines on these veins averaged one ounce of gold per ton, according to shipping records.
Our proven reserves of 86,000 ounces of mineable gold in the Nancy Hanks and Willie vein structures represents only 1500 feet of total vein strike-length in a district with a minimum of 30,000 feet of mapped vein strike-length. It also only represents the upper 500 feet or less of the veins. Furthermore, the Grant-Hartford, Lead King, and Willie veins occur within the Garnet Range quartzite, and occupy the crest of the Deep Creek anticline, which plunges northwest, and it is reasonable to expect each of the veins to continue to the northwest along the anticlinal crest for some 4000 linear feet. It is geologically feasible that the reserves represent 5% or less of the gold resources that might ultimately be mined in the Garnet district. The resources near Coloma and east of Day Gulch would add significantly to that estimation.
In spite of extensive historical productivity, the gold reserves of the Garnet-Coloma district have only barely begun to be explored with systematic surveying, geologic mapping, diamond drilling, assaying, and subsurface modeling. We have blocked out mineable gold reserves and resources in vein systems whose boundaries extend in three directions.
Dr. Sears indicates in his professional opinion, that geologic mapping and analysis suggests that our proven gold reserves comprise less than 5% of the gold resources that may ultimately be recovered by underground lode mining.
Corporate and Project Objectives
It will be a priority for GGC to undertake and complete the following tasks:
- Continue to update all existing geological, geophysical, geochemical, and historic data into Vulcan’s sub-surface 3D mine modeling program to better identify mineable ore zones, assist in mine planning, exploration planning, and establish an updated reserve calculation.
- Initiate production utilizing the Golden Sunlight mill owned by Barrick Gold and continue advancement of planning and permitting for construction of a milling facility to process high-grade ore and provide quality, representative samples.
- Establish an on-site fire assay laboratory for quick field assessment.
- Review geophysical results obtained in 2009 and 2010 to determine if further geophysical surveys would be warranted.
- Finalize underground mine planning to ensure successful and efficient ore extraction when underground development begins.
- Engage an underground mining contractor or recruit seasoned miners out of the Coeur d’ Alene district to begin initial underground development and ore extraction.
- Design an expanded and confirmation core-drilling program with the intent of bringing more material into a reserve category. Drill plans should include, but are not limited to:
- Continue exploration drilling along the NW Nancy Hanks trend with the intention of connecting it to the Tostman zone area which could be put into production near term. The potential for adding reserves should be the highest priority.
- Continue to expand the Willie vein down dip and along strike either from surface or underground drill stations. Investigate the potential for this system to continue to the west side of First Chance Gulch.
- Continue definition of the Grant and Hartford vein system.
- Continue to delineate the Tostman deposit and bring known mineralization into a reserve category.
- Conduct moderately-spaced drill sections in the International portion of the Nancy Hanks vein system. This zone would be the first ore available when underground mining commences.
- Drill at least 3 or more additional high-value targets of the 30 high-grade targets identified in previous drill programs. Drilling the San Jose’ mine vicinity, the Coloma district, and various potential extensions of vein structures to the east of First Chance Gulch identified by Dr. James Sears.
- Drill at least 4 more core holes twinning high-grade R/C intercepts.
- Continue to utilize the geology team to increase our knowledge database.