Standard Gold Mining Resources (OTCBB:SDGR.OB), majority-owned by Wits Basin, currently controls the Bates-Hunter Gold Mine exploration project located in Central City, Colorado. The Bates vein, formerly mined in the Bates-Hunter Gold Mine, was the second gold lode discovered in Colorado and helped spark the great Colorado gold rush of the mid-1800s. The Central City mining district produced approximately 4 million ounces of gold and almost 120 million ounces of silver. Nine principal veins underlie and are controlled by the Bates-Hunter property. These veins have historically produced approximately 250,000 ounces of gold to a depth of about 500 feet below surface.
The Bates-Hunter Gold Mine was closed in 1936 when the market price of gold remained fixed while production costs rose, causing the entire Colorado mining district to become unprofitable. At that time, the Bates mine shaft was 727 feet deep; however no production records have been found for mining between 500 and 727 feet. Other comparative mines in the area reached depths in excess of 2,200 feet and were still in ore at the time of closure. Historical and current geological assessments show significant potential for the Bates-Hunter controlled veins to extend downward beyond the 727-foot mark.
The Bates-Hunter project shows considerable exploration potential. The company’s 2008 independent NI 43-101 report stated, “Judging from past production, historic mine maps and assays, modern assay results, and recent exploration by Wits Basin Precious Minerals, the Bates Vein alone could host as much as 500,000 additional ounces of gold.” Extrapolating historical production agrees relatively well with this estimate. Historical production records indicate that the Bates vein produced between 138,000 and 150,000 ounces of gold along its approximate 3,400-foot strike length to a depth of 500 feet at average grades between 0.16 and 1.87 ounces per ton gold. If this same 3,400-foot strike length were mineralized at similar grades below the deepest Bates mining level of 727 feet, and if mineralization extended to depths of 2,200 feet as did the deepest mine in the district, the Bates vein could host an additional 450,000 ounces of gold. The company currently controls approximately 2,000 feet of the Bates vein strike length, or about 60% of the historically productive length. The strike lengths of the Vasa, Leavitt, Gettysburg, and the six other veins covered by the project claims could multiply this potential to depths below 2,000 feet.
The Bates-Hunter mine is located about 35 miles west of Denver, Colorado in a residential district within the city limits of Central City, which in recent years has become home to gambling casinos. The Central City mining district lies on the east slope of the Front Range where elevations range from 8,000 feet in the east to 9,750 feet in the west. The Bates-Hunter mine property is generally zoned for mining or industrial use. Colorado State Permit M-1990-41 covering the Bates-Hunter Gold Mine is in good standing but would need to be substantially supplemented. The Bates-Hunter shaft is equipped with a two-compartment 85-foot-tall steel head frame and a single-drum five-foot hoist capable of using a one-inch diameter rope to hoist two-ton skips from 1,000 feet depth. The shaft requires rehabilitation and would not suffice for full-scale production. A modern water treatment plant constructed adjacent to the mine head frame is a significant asset, given the mine site location and environmental concerns. It has treated over one million gallons of acid mine water to comply with strict drinking water standards. The water treatment plant was constructed and operates at no cost to the U.S. Environmental Protection Agency or the Colorado Department of Public Health and Environment. Substantial water rights are attached to the project and there is ample water supply.
To date, we have performed:
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more than 12,000 feet of core drilling from surface |
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surface mapping and sampling of the project and surrounding area |
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underground mapping and sampling |
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detailed research and interpretation of structural geology of the vein systems |
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computer modeling of veins, vein intersections, and structural geology to generate exploration targets |
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surveys of mineral claims, mine workings, and physical features of the project |
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dewatering work on the Bates Hunter shaft in preliminary anticipation of underground drilling; and, |
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permitting activities and water sampling and analysis related to the water treatment plant. |
This work has generated numerous drill targets on the Bates and adjacent veins controlled by the project. Our geologic team has now become perhaps the most knowledgeable in the industry on this historic gold/silver exploration and productive mining district.
Based on our evaluation of the information compiled, we now anticipate a two-stage work program at Bates-Hunter. In Phase I, we intend to continue water treatment and mine rehabilitation as previously completed to a depth of 500 feet. This work will include re-timbering, substantial dewatering, upgrades to mine shaft and drifts, increasing the existing water treatment capacity, creating underground drill stations, and performing underground exploration drilling. In Phase II, we plan to continue our dewatering program, rehabilitate the shaft to deeper levels, and continue drilling at depth. If feasible, during this phase we may also ship bulk samples, which could potentially produce initial revenue. Successful completion of Phases I and II would lead to a Phase III plan to proceed to small scale production, subject to financing.
It should be noted that the above exploration targets and potential gold ounces are geologically speculative and would be subject to substantial drill programs, technical and economic feasibility, dewatering and water treatment, environmental and operational permitting, and land title issues, none of which can be assured at this stage.
Bates-Hunter
Latest Assay Results - August 25, 2008
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Bates-HunterNI 43-101 Compliant Technical Report - July 28, 2008
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Bates-HunterBusiness Development Plan Updates - June 24, 2008
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Bates-HunterBusiness Development Plan Updates - December 5, 2007
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Bates-HunterBusiness Development Plan Updates - November 29, 2007
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Underground Assay Results |
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Bates-HunterDiamond Drill Hole BH07-07 Section Maps
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Bates-HunterGold Mine Section Maps
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