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Location: 63 miles NE of Reno, Nevada Area: 4 sq. miles Minerals: Gold, silver Ownership: 100% Status: Exploration w/ NI 43-101 resource Drilling Expands Existing Gold Zones The Jessup property holds excellent potential for both bulk and underground mining. Based on a 2007 NI 43-101 resource calculation, the property's three primary mineral zones contain an estimated 142,000 ounces of gold in the indicated (122,000 ounces) and inferred (20,000 ounces) categories. Much of the ground remains untested, including several new zones. Drilling on the Jessup project shows mineralization is open in the San Jascinto, and North Jessup targets. Additional targets have also been identified. The 2008 drilling is expected to increase gold resources, and a resource update is planned for 2009 along with Phase 2 drilling. Phase 1 Drilling Summary Phase 1 drilling at Jessup, consisting of 5,120 metres in 45 reverse-circulation drillholes, was completed in October of 2008. The program intersected gold in new areas and expanded gold zones in the known resources. Results of the first 24 holes, using a 0.34 g/t (0.01 opt) gold cutoff for intervals greater than 3 metres, are reported in detail in our October 22, 2008 News Release and summarized below:
NI 43-101 Resource Calculation Mine Development Associates (MDA) of Reno, Nevada, completed a new NI 43-101 resource estimate for Jessup in 2007, calculated as follows: Jessup Property Undiluted Resource Tabulation
The tabulated resource is based on a gold grade cutoff of 0.01 oz Au/t for oxide, 0.015 oz Au/t for mixed material, and 0.025 oz Au/ton for all unoxidized mineralization. The gold equivalent portion of the resource was calculated using gold ounces plus silver ounces divided by 50 (Gold and Gold Equivalent Ounces = gold ounces + silver ounces/50). Metallurgical recoveries from the oxide and mixed material show that they are over 70% while the recovery from one unoxidized sample produced a poor result (12% Au recovery). The estimate corroborates historic resource estimates on the project and provides evidence for upside potential along newly identified structural and lithologic gold controls. One such geologic gold control is the occurrence of gold associated rhyolite volcanic domes. The margin of the northwest trending dome complex has not been tested and opens up a new geologic interpretation for gold traps on the project. Another structural control is the presence of high-grade gold (>5g/t) along northeast striking vein sets. Rye Patch has identified and sampled two of these vein zones that have returned multiple high-grade gold assays. The reported gold resource estimate is based on 3-D geologic models that incorporated over 17,000 individual gold and silver assays from 290 drillholes and 36 trenches totalling 106,935 feet. MDA constructed cross sections, spaced 50 to 100 feet apart through the entire resource area and surroundings. Drillhole information, including host lithology, oxidation state, alteration, and gold and silver values, along with the digital topography, was plotted on the cross sections and a 3-D geologic model was constructed. MDA classified the Jessup resources by a combination of distance to the nearest sample and the number of samples used to estimate a block. The block model was constructed with blocks measuring 25 feet by 25 feet by 20 feet (high). Estimation used partial blocks based on long section interpretations to simulate vertical dilution if mined on 20-foot high benches. The foregoing Jessup resource estimate was prepared by Steven Ristorcelli, P.Geo. and Paul Tietz, C.P.Geo, both of MDA. Exploration History and Historic Resources Estimates Exploration activity at Jessup in the early 1900s focused on veins and breccias and may have resulted in production of about a thousand ounces of gold prior to 1940. At least seven mining companies or individuals have explored the property since the 1960s with no further production to date. In the late 1990s, Echo Bay Exploration Inc. conducted the most extensive program, including drilling of 123 RC holes and two core holes. In addition to drilling, extensive sampling and trenching has occurred on the property, as well as geologic mapping and geophysical surveying. Pan-Nevada commenced exploration in 2006 and completed 53 holes for a total of 8,026 ft of mostly RC drilling. Including the Pan-Nevada drill holes, 290 drill holes and 36 surface trenches, for a total footage of 106,935 ft has been completed on the Jessup property. Several estimates have been made of the mineralized material or resources of gold and silver on the Jessup property. The most recent historical estimate was made by MDA in 1998 upon completion of Echo Bay's exploration program. MDA's reported resource at a 0.01 oz Au/ton cutoff grade was 8.4 million tons averaging 0.024 oz Au/ton and 0.25 oz Ag/ton, for a total mineral inventory of 241,000 Au equivalent ounces. Geology and mineralization On the Jessup property, a series of Tertiary bimondal (andesite/rhyolite) volcanic and lacustrine sedimentary rocks overlies metamorphosed basalts and quartzo-feldspathic sandstones thought to be Triassic/Jurassic in age. Younger rhyolite flows, domes and dikes were emplaced along what appears to be a ring-fracture system of a caldera within the Jessup district. The Tertiary fine-grained lacustrine rocks and minor pyrite-bearing chert, are interbedded within a thicker package of rhyolitic lapilli tuff, and these units host most of the disseminated mineralization at Jessup. Normal and oblique-slip faults found in the district were active at least during a pre-rhyolite phase, a post-rhyolite phase and a post-mineralization phase. Argillic, limonitic and silicic alteration that post-dates the rhyolite is found on the property. Blanket-shaped argillic alteration, mostly localized within the rhyolite lapilli tuff, is the dominant alteration style throughout the Jessup mineralized area. A thick package of argillized rhyolite occurs in the San Jacinto area while near-surface argillization occurs throughout Central and North Jessup. Disseminated limonite (pyrite at depth) is found along a broad arc across the district but is most pronounced in the Central and North Jessup areas. Silicification occurs throughout the district but is more local, restricted to particular structures and is often accompanied by at least traces of gold. Volcanic-hosted, epithermal gold and silver mineralization occurs at Jessup and, like the alteration, is both lithologically and structurally controlled. Both disseminated and fracture-controlled vein mineralization are present. Lapilli tuff and siltstone are the predominant hosts with minor, often structurally controlled, mineralization occurring within the underlying andesite. Low-grade disseminated mineralization which volumetrically comprises the great majority of Jessup mineralization has been identified in the San Jacinto and the North and Central Jessup areas. Three types of distinct vein systems have been reported within the project area: crystalline quartz veins generally less than three-feet wide with narrow selvages of argillized wall rock; chalcedonic quartz veins with minor crystalline quartz that areup to ten feet wide associated with extensive argillization and locally pervasive silicification; and silica-healed breccias forming veins up to eight feet wide along fracture/fault zones. Within the disseminated mineralization, gold-silver grade is often directly associated with the intensity of silicification. The silicification can occur as localized pervasive flooding or as a fine stockwork of silica veining with the argillized wall rock. Recent 2006 drill results in the North Jessup area has shown that extremely high-grade gold (< 1.0 oz Au/ton over a 5-ft interval) is associated with narrow (< 2-in wide) chalcedonic quartz veins within weakly mineralized argillically altered rhyolite lapilli tuff. 2008 Drill Program
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