The company is in the process of defining and producing gold reserves on existing leases, while acquiring additional leases with established gold reserves. The corporate strategy takes a long term result-orientated approach to exploration and development of its reserves. As the company has both domestic and international reserves, it has made a conscious decision to bring the domestic reserves on production first. The company has proven developed domestic reserves with mining permits. The United States is one of the least hostile and most government friendly places in the world to operate a mine.
The company feels that there are no new gold discoveries, but that new technology has been developed to find new gold at old sites. That is the reason that the company has been examining old gold sites, sites that have sufficient reserves to be economical and are ready to come on production, and sites with enough historical data to redefine the ore body.
The company will continue to look for additional gold leases that meet its corporate criteria of being able to go into production quickly.
The reserves in the company have been defined as follows:
- Proven Developed---enough development work and analysis has been completed to define the amount of gold that is available to be mined. In addition, the parameters for mining have been designed and the mine is ready to begin production.
- Proven---enough development work has been completed to confirm that there are sufficient gold reserves to be mined economically. However, the necessary development and analytical work has not been completed to define mining parameters.
The company also has probable reserves which are not used in any assessment. With probable reserves it is apparent that there is gold present, but significant development is necessary to define the probability of successfully mining the gold.
Reserves
| Region | Proven Developed | Developed |
|---|---|---|
| Ecuador & Peru | 695,000 | |
| Montana | 105,000 | 175,000 |
| TOTAL: | 800,000 | 175,000 |
| NOTE: The Reserve Summary is based on historical geological and production data, random sampling throughout the leases, independent analysis of samples, and geological analysis by in-house geological staff. The production plans are based on in-house expertise. The reserve summary for domestic reserves is not based on independent engineering reports and, as such, caution should be used in relying on the figures. The Montana project also has a significant sapphire reserve that has not had a value assigned to it. The testing and published historical test data have shown that there are 2500 carats per ton of rock mined in certain areas. These sapphires range from .5 carats to 14 carats and are of excellent quality.The value is currently being evaluated. Finally, the company has reassessed the viability of the Colorado project and feels that its resources are better utilized with its operations in Ecuador and Peru. |