New Jersey Mining Updates Golden Chest Progress

KELLOGG, ID - New Jersey Mining Company reported on ts recent progress at the Golden Chest mine and its plans for future development, gold production and exploration.
During the fourth quarter of 2008, the North ramp was connected with the historic No. 3 level at a point that is 600 meters from the No. 3 portal. Near the North ramp intersection, the No. 3 level was found in good condition, although about 300 cubic meters of slimes (fine-grained rock particles) had to be pumped from the drift. During pumping, compressed air, water and discharge pipelines were installed to the south where the No. 3 level intersects the Idaho vein. At this point, the No. 3 drift was found to be caved near an old stoping area. The caved area is about 400 meters from the surface.
After assessment of the No. 3 level, it was decided by Company management that the quickest and least expensive approach to gaining access to its block of gold ore reserves on the Idaho vein is to drive a new adit parallel to the No. 3 level. This new adit would provide improved ventilation and a secondary escape route as well. The new adit would require about 400 meters of drifting, which is estimated to cost $700,000 and would take six months to complete. It would provide access to 231,000 tonnes of ore reserves on the Idaho vein that has an average grade of 5.08 grams of gold per tonne (gpt), which would feed the New Jersey mill for about seven years, at its current capacity, resulting in an annual production rate of about 4,500 ounces of gold. Cash costs are estimated to be about $630 per ounce.
Completion of the new No. 3 adit will be dependent on the Company's ability to raise funds through an equity placement, which minimizes shareholder dilution or the sale of a joint venture interest.
After analyzing geologic data and inspecting the old No. 3 workings, it appears possible to, at least, double the current Idaho vein reserve block. This would be done by drilling above, but primarily below the current reserve block. The current Idaho vein reserve block extends only 90 meters vertically below the No. 3 level. A series of six 250 meters holes drilled from the surface could potentially add 170,000 tonnes of gold resources on the Idaho vein if it persists at depth. An important benefit of a new adit would be as a platform for drilling in the northern part of the mine for additional high grade Katie and Dora-type oreshoots. The primary goal of the exploration program would be to prove up enough gold resources to justify increasing the New Jersey mill capacity or the construction of a larger flotation mill at the Golden Chest.
Currently, the Company is mining ore from a remnant pillar on the Katie vein and from a section of the recently found Clagett vein and shipping the ore to the New Jersey mill. In an effort to conserve cash, the Company has suspended development activities, which resulted in the laying off of one crew of three miners, with a single crew of three miners focused on mining the Katie and Clagett veins at a rate of 400 tonnes per month. The tonnage of ore available from these veins is limited as compared to the Idaho vein reserve block. An internal ramp is being driven in the Katie vein area to investigate a jackleg hole that intercepted 36.4 gpt gold across 1.2 meters at a distance of 6 meters from the main ramp.
The Company's Concentrate Leach Plant (CLP) in Kellogg is performing at design criteria for the Golden Chest concentrate, although more fine tuning is needed to maximize gold recovery in the electorwinning cell. Several batches of gold-silver dore' have been produced by the plant and sold.
The company’s address is 89 Appleberg Road P.O. Box 1019 Kellogg, ID 83837, 208-783-1032, fax: 208-783-3331, email: [email protected].