Sutter Gold Mining Inc.
Investors
Sutter Gold
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Lincoln Project Total Mineral Resource Estimate (in Imperial Measure)

 

Ton

Uncut Grade
oz/ton

Gold
(oz)

Indicated Mineral Resources

 

 

 

Lincoln-Comet area

511,700

0.37

188,481

Keystone area

161,900

0.21

34,563

Total Indicated Resources:

673,600

0.33

223,044

Total Inferred Mineral Resources:

2,377,900

0.19

458,914

*Source: NI-43-101 Technical Report,prepared by Mark Payne, February 5, 2008

View the Lincoln Project NI 43-101 Technical Report, February 2008 by Mark Payne, P.Geo.

PROPERTY HISTORY AND MILESTONES

Sutter Gold controls a 3.6-mile segment within the most productive 10 miles of the historic Mother Lode Gold Belt, including eight historic mines. Collectively, these mines produced over 3.5 million ounces of gold, representing 27% of the historic production from the 120-mile long Mother Lode Gold Belt. Seven of eight historic mines on the property had documented un-mined resources in place at the time of their closure. The geology is favourable with gold-quartz vein mineralization of orogenic or mesothermal type, hosted within a regional scale deformation corridor cutting late Jurassic meta-sediments and lesser mafic to intermediate meta-volcanics of the Mariposa Formation.

The Lincoln Project has been the subject of considerable modern exploration activity, mainly focused on the Lincoln and Comet zones, which are adjacent along strike. A total of 101,385 feet of drilling has been completed in 230 diamond drill holes, and modern underground development consists of a 2,850 foot declined ramp with 1,575 feet of horizontal cross-cuts, 1,275 feet of horizontal ore development and 250 feet of vertical raise development.

In March 2011, a NI 43-101 compliant Preliminary Economic Assessment Technical Report, was completed on the Lincoln Project by Mine Development Associates. This report lead to the decision to proceed with development of the mine site.

In February 2008, a NI 43-101 compliant technical report was completed on this property, which includes Total Indicated Resources of 612,400 tonnes grading 11.3 g/t gold (673,600 tons grading 0.33 (uncut) ounces of gold per ton) for 223,044 contained ounces of gold for the Lincoln-Comet and Keystone areas. Total Inferred Resources (including estimates from pre-1980's historical data) totalled 2,161,700 tonnes grading 6.6 g/t gold (2.38 million tons grading 0.19 (uncut) ounces of gold per ton) for 458,914 contained ounces of gold. The 2008 Indicated Mineral Resource estimate represents a 29% increase in ounces and 37% increase in tonnage over the 2006 estimate. Consulting Geologist and independent Qualified Person Mark Payne, P.Geo completed this resource estimate. These resources were defined according to CIM Definitions for Mineral Resources, and are compliant with NI 43-101, Standards of Disclosure for Mineral Projects.

Historic Mines on SGMC Property

THE HISTORY OF THE LINCOLN PROJECT

The Sutter Gold Mine project is located in Amador County, California, near the historic gold rush towns of Sutter Creek and Amador City. The project covers an approximate 3.6 mile strike length through the heart of the Mother Lode, and contains over 680 acres of mineral rights. The current project found its beginnings in the 1980s, however, the history of gold mining on the project's property dates back to the 1850s.

The Mother Lode is well known for the 1848 gold rush, which was sparked by James Marshall's discovery of a large gold nugget in the American River at John Sutter's saw mill in Coloma. Hundreds of thousands of fortune seekers flooded the northern California foothills, working the streams and rivers for gold. As these placer deposits became scarcer more difficult to extract, miners began to look for new ways to improve their incomes. By 1850, the miners learned that the gold nuggets in the rivers were formerly embedded in the mountains, and could be found in quartz veins that ran underground through the Sierra Nevada foothills. Thus placer miners soon became hard rock miners, locating quartz outcroppings and following them deep into the earth to extract gold from the quartz. The section of the Mother Lode between Plymouth and Jackson, which includes the Sutter Gold Mine project, was particularly rich with an estimated historic production of 7,851,000 ounces of gold. The mining industry was alive and active in Amador County until 1942, when government order L-208 closed all the mines with the purpose of supporting the war efforts. While the mines were closed, ground water filled the workings, and many of the mines' equipment and ground support fell into disrepair. Post WWII most mining companies found it unprofitable to resume mining, given the cost of pumping water out the flooded workings, repairing the mines to a functional state, the increasing cost of operating, and working under a government-fixed price of gold that limited potential revenues. The last mine in production in Amador County was the Central Eureka, which finally closed its doors in 1958.

In the 1980s, mineral exploration companies began investigating, drilling, and sampling former mining claims to determine if economically profitable gold deposits still remained in the Mother Lode. This led to the development of the Lincoln Project, named for its location at the historic Lincoln Mine site. Between 1989 and 1991 exploration work included the 2,850 ft long Stringbean Alley decline and 3,100 ft of crosscuts, drifts, and raises.

Throughout the 1990s and 2000s, the Project has continually progressed in permitting and design. The Environmental Impact Review was completed and a Conditional Use Permit obtained in 1998, and Waste Discharge Requirement permits were secured in 1999 and 2007.

A mine tour was established at the Lincoln Project site in 1999, as a means of utilizing the mine site and generating income during the lead-time to construction and production. This allowed the public a rare opportunity to see the inside of the historic Mother Lode from the safe environment of a modern, hard rock gold mine. The mine tour is no longer operational.

HISTORIC MINES

Lincoln Mine

The Lincoln Mine, which was originally called the Union Mine, was established in 1851. It boasted one of the first stamp mills in the area, and showed a promising future early into exploration. One of the major shareholders was Leland Stanford who, at the persuasion of local resident and fellow stock holder R. C. Downs, invested additional funds after the mine experienced a production slump in the late 1850s. The investment paid off, with the Lincoln Mine locating a rich vein and estimated to have produced over 100,000 ounces of gold. Stanford sold his shares, and taking his mining fortune went on to become a builder of the transcontinental railroad, governor, senator, and founder of Stanford University.

In 1906 the Lincoln Consolidated Mining Company acquired the Mahoney and Wildman Mines. The Wildman and Mahoney were estimated to have produced about 72,500 ounces of gold, creating a combined total of over 172,500 ounces from the three mines by 1900. Costs of exploration and the shareholders' unwillingness to invest more funds led to the end of production in 1912, although the mine was later bought and explored by other mining companies. At closure the Lincoln, Mahoney, and Wildman shafts had reached depths of 2,000ft, 1,200ft, and 1,400ft respectively.

Keystone Mine
On January 24, 2000, Sutter Gold Mining Inc. entered into a lease agreement to acquire 50 acres of land adjacent to the Lincoln Project's northern boundary. This property is the site of the historic Keystone mine, which was well known as one of the most profitable of the Mother Lode mines. The Keystone was formed from several smaller claims that dated back to 1851. A high rate of ownership turnover and several unsuccessful attempts to operate the mine between the years of 1851-1865 resulted in a grim outlook for the property. Finally, in December of 1865 James McDonald, Andrew B. McCreary and others purchased the property. In early 1866, at the suggestion of the miners working the Keystone tunnels, an easterly crosscut was driven that broke into a vein that was an obvious treasure-trove. From that point on, the Keystone continued to consistently produce around 2,000 ounces, or $40,000 worth of gold a month until it came to be recognized as one of the most profitable gold producers in the world. The mine sold in 1909, and operations continued until the mine closed in 1919. The Keystone Mining Company gained control of the South Spring Hill Mine in 1920, and in 1933 the Keystone reopened and operated until 1942, when it was closed by the war production board order. At closure, the depth of the Keystone had reached 2,600 feet, and the mine had produced 850,000 ounces of gold for a total of $24,000,000.

Eureka Mine
On January 21, 2005, Sutter Gold Mining Inc. entered into a lease agreement to acquire 132 acres of land immediately adjacent to the Company's properties in California, called the Eureka Property. The property is the site of two historic, highly successful mines known as the Old Eureka and the Central Eureka.

The Central Eureka originally opened as the Summit Mine in 1855, and operated continuously until 1875. The mine went idle from 1875-1895, but in 1893 was purchased by the Central Eureka Mining Company for $6,000. With the exception of one year, the mine went on to operate continuously and profitably from 1895 through 1942, when the Federal Government's War Production Board Order L-208 suspended all gold mining operations. The mine re-opened in 1946 and was in operation until 1958. At this time, the Central Eureka's main shaft had reached a depth of 4,500 feet, and along with its holdings at the Old Eureka, had produced 1.8 million ounces of gold.

The Old Eureka opened in 1852, and in 1859 its primary owner, a man named Alvinza Hayward, consolidated the property with an adjoining claim. By 1867 the mine was operating a 56 stamp mill, and in 1869 the Amador Mining Company purchased the mine for $750,000. One investor and director on the AMC board was a man named Edward H. Green, who was the husband of one of the richest and most publicized women in the country, Hetty Green. The Greens lived for a while in Jackson, but in 1881 after a relatively unsuccessful production period at the mine, Hetty banished her husband and closed the project. The mine then became idle for a period of 35 years, from 1881-1916, and only briefly resumed operations between 1916 and 1920. In 1924 the Central Eureka Mining Company purchased the holdings of the Old Eureka, and in 1930 major ore production shifted from the workings of the Central Eureka to those of the Old Eureka. Mining operations were suspended in 1942 by the federal government's wartime edict, but the project was able to resume operations again from 1946 until it's closing in 1958. At its close, the Old Eureka mine had reached a depth of 4,500 feet.

Bunker Hill Mine
The Bunker Hill Mine, originally called the Ranchoree or Rancheria Mine, was started in 1853. The Bunker Hill Quartz Mining Company was organized and began serious work in 1863. The mine produced well even when in low grade ore, and by 1880 had a 40-stamp mill and a chlorination plant in place. The mine was worked intermittently up to the 1890s, but became idle long enough that the main shaft caved in and the chlorination plant fell into disrepair. In 1893 operations resumed as the mine was reopened, brought back into working order, and renamed the South Mayflower. The Bunker Hill Consolidated Mining Company organized in 1899 and worked the mine continuously until selling the property in 1922. Little milling or prospecting was done by the new mine owners, with the last of the work being done in 1925. Several known ore bodies had been documented, but remained unmined at the time of closure. The Bunker Hill mine was worked to a depth of 3400ft, with a total estimated total production of 250,000 ounces of gold.

Original Amador
The Original Amador Mine opened in 1852, reportedly in one of the first identified locations for gold-bearing quartz veins in Amador County. It was one of the smaller producers of the region with the majority of the ore being low grade, but operations were profitable nonetheless. By 1872 a 40 stamp mill was in place, and the mine was worked intermittently until 1898. The Original Amador Consolidated Mines Company then operated the mine continuously until 1917, when the California Debris Commission placed the Original Amador, as well as the neighboring Keystone mine, under bond. Due to this financial impact, the Original Amador closed in 1918, after having a greater production in 1917 than any previous year. The mine reopened again in 1934 and continued working until 1937, with the mill being used from 1937 to 1942 to treat ore from the Keystone mine. Total production from the Original Amador is estimated to be in excess of 175,000 ounces of gold, with workings having reached a depth of 1200 ft and comprising over 8 miles of drifts, crosscuts, and raises.