The Nivloc Mining Project is an advanced exploration project focused on the past-producing Nivloc silver-gold mine in the Silver Peak mining district in Nevada. As of April 5, 2012, thirty-seven (37) drill holes, totaling approximately 10,500 metres were completed on the property.
Silver-gold mineralization at Nivloc is classified as being a quartz-adularia epithermal vein system. While the Nivloc Mine was mined and milled from 1937 to 1943 by Desert Silver Inc. a considerable un-mined (historic non NI 43-101 compliant and therefore not be relied upon) resource of 621,314 short tons at a grade of 4.5 oz/t Ag and 0.03 oz/t Au was documented by Anaconda Minerals Company in 1951 and by Sunshine Mining Company in the mid-1980s.
43-101 Technical Report: Inferred Mineral Resource
The Company is pleased to present its initial National Instrument 43-101 ("NI 43-101") compliant, independent Mineral Resource Estimate (the "Estimate") on its Nivloc Silver and Gold Project located in southwestern Nevada, USA (the “Nivloc Property”). The Estimate, is contained in the "NI 43-101 Technical Report on the Nivloc Property, Esmeralda County, Nevada, USA," which was prepared for the Company by Seymour M. Sears, a consulting Geologist based in Sudbury, Ontario; P. J. Hollenbeck, an independent resource modeling Geologist based in Colorado Springs, Colorado; and, A. David Heyl, an independent Geologist based in Denver, Colorado.
The report indicates that the area tested by the 2011 drilling program on the Nivloc Property contains an Inferred Mineral Resource, at 40 g/t Ag cut-off, of 1,640,000 tonnes at a grade of 106.47 g/t Ag and 0.78 g/t Au.
The Estimate relates to an area tested by 34 drill holes completed in 2011 and located within a 365 metre long portion of the northeast trending Nivloc Structure. This zone, referred to as the “Target Zone” lies between two small, previously mined zones within the northeast-southwest-trending vein structure and between the 200 and 800 foot level drifts in the old mine workings. The 800 foot mine level is approximately 900 feet vertically below surface, and the vein and workings dip from -45 to -65 degrees toward the northwest. The structure has been traced at surface and in old development drifts for a distance in excess of 2,000 metres. The 2011 drilling program indicates that the area targeted within the Nivloc Structure ranges from 25 to 70 metres wide and contains several parallel vein zones that were the focus of previous mining at Nivloc. These vein zones are of relatively high grade, but the material separating them is also consistently mineralized and the entire structure may have potential as a bulk-minable deposit, but there can be no assurance of such potential until further work is performed.
The Technical Report recommends a Phase 1 exploration program having these objectives: 1) improving the level of confidence within the drilled area by tightening the drill spacing (at least 11 drill holes); 2) expanding the currently defined resource area by drill testing along strike towards the northeast and southwest (at least 5 drill holes); and 3) initiating preliminary metallurgical, and engineering studies and baseline data collection in anticipation of an underground exploration and development program (Phase II). This recommended work program is expected to upgrade the resource from the inferred to the indicated category, but there can be no assurance of such an expected upgrade. The recommended program includes a total of 16 drill holes (4,000 meters) and is estimated to cost approximately $1.3 million.
The Company purchased 100% interest in the Nivloc Mine Property, located seven miles southwest of Silver Peak and 170 miles south-southeast of Reno, in Esmeralda County, Nevada, in September 2007. The properties include three existing lode claims (the “Mine Claims”) acquired by purchase from a private party and six staked claims, beginning 1,500 feet along strike to the northeast of the Mine Claims. The two properties, totalling approximately 180 acres, were purchased for US$75,000 and 110,000 shares.
On February 25, 2011, the Company executed an Option and Joint Venture Agreement with Silver Reserve Corp. (“SRC”), pursuant to which the Company acquired the right to purchase up to 85% interest in 18 unpatented lode claims (the “NL Extension Claims”) contiguous with and surrounding the Company’s existing the Nivloc Mine Property, in the Silver Peak mining district, Esmeralda County, Nevada.
At May 3, 2011 and October 5, 2011, the Company recorded an additional 95 claims (the “Additional Claims”), the Nivloc Claims, that it had staked continuous to, and forming part, of the Nivloc Mine Property Claims, in Esmeralda County, Nevada.
Following the Company’s acquisition and completion of a positive feasibility study, the entire Nivloc property is to be developed on an 85/15 Joint Venture basis. SRC has the right to contribute to the development of the 122 claim Nivloc Mine Property and retain a 15% interest therein, provided that it contributes 15% of further exploration, development and mining expenditures. Failure by SRC to contribute 15% of the expenditures for further exploration, development and mining will result in dilution of its interest. If SRC’s interest is diluted to 10% or less, its interest in the Nivloc Mine Property will revert to a 2% NSR Royalty.
The Company plans to complete the following work on the propety in order to upgrade the resource from the inferred to the indicated category:
7 miles southwest of Silver Peak and 169 miles south-southeast of Reno, in Esmeralda County, Nevada.