DG Granade, Shingle Springs, gets go ahead for Underground Gold Mine
Sutter Gold Mining Receives Mill Building Permit on the Lincoln Project, California
Sutter Gold Mining Inc. CA:SGM +8.82% (otcqx:SGMNF) ("Sutter" or "the Company") is pleased to announce that it has received the building permit to construct the new mill complex at its Lincoln Mine Project in the heart of California's Mother Lode gold belt. The Amador County Building Department issued the key permit on March 1, 2012.
"This is a critical milestone for our company," said Leanne Baker, President & CEO of Sutter. "Our site is completely winterized, our Mine Safety and Health Administration training program is in place, and we intend to begin excavation work for the foundation in the next several weeks. As the mill foundation / building construction proceeds through the summer and fall of 2012, we plan to work concurrently to prepare and develop the underground stopes for mining." Sutter's Lincoln Project, upon completion, will represent the first commercial underground gold mining operation on the historic Mother Lode in more than 50 years.
Sutter's Board of Directors approved the development of the Lincoln Project in 2011 based on the positive Preliminary Economic Assessment ("PEA") provided by Mine Development Associates of Reno, Nevada, USA. Under the 2011 PEA, gold production in the first five years focuses on the shallow portion of the Lincoln-Comet vein zone, and averages 23,000 ounces per year at a cash cost of about U.S.$700 per ounce before royalties. The mine would operate seven days per week at an estimated rate of 150 tons per day (tpd), with the mill rated at 210 tpd operating five days per week. In situ grade of the resource in the first five years is estimated to average 0.57 ounces per ton (opt), with dilution bringing the milled head grade to 0.46 opt. Sutter cautions that mineral resources that are not reserves have no demonstrated economic viability. A 30-hole exploration program is underway within the current mine envelope. Five holes have been completed and await assay results.
The Company awarded the foundation construction work for the mill and shop/staff services buildings to DG Granade, Inc. of Shingle Springs, California after evaluating proposals from seven qualified firms. DG Granade, Inc. is based in neighboring El Dorado County. DG Granade, Inc. will use several local suppliers and subcontractors including Amador Transit Mix, Short Circuit Electric, JM & Sons for plumbing and A Allbright Steel Services, Inc. to supply steel for rebar fabrication and installation. Site grading is being performed by Doug Veerkamp General Engineering, Inc. The completed Tailings Processing Area is currently being used for storage and staging.
Purchased mill equipment is being evaluated and refurbished as necessary. Four 700 CFM XLLE type Ingersoll-Rand air compressors were delivered in January to the company's shop in Amador County for inspection by Cisco Air Systems of Sacramento. The Marcy 3 x 3 regrind ball mill has been disassembled for inspection, as well. Sutter's staff has already replaced the wear parts in the purchased Pioneer 10 x 36 primary jaw crusher. The coarse ore bin belt feeders and Denver 24 Sub-A flotation cells are being rebuilt by Mammoth Mine Services in Denver, Colorado for delivery in April and July, respectively. The company expects to accept delivery of the Marcy 6 x 12 primary rod mill in March.
In January, Sutter received two air permits from the Amador Air District. The first permit is a comprehensive, site-wide "Authority to Construct," allowing construction and start-up of the planned mine and mill facilities, mine waste management facilities and ancillary facilities and improvements. The second permit allows for installation of back-up power.
The material in this news release has been reviewed by Matthew Collins, COO, a Qualified Person as defined by Canadian NI 43-101.
Sutter is a growth-oriented exploration and development company preparing to become a North American gold producer. The Company has two projects: the Lincoln Project located in Amador County, California and the Santa Theresa Project located in the Northern Baja region of Mexico. Currently, the Company's primary focus is the evaluation and development of the Lincoln Project, beginning with the shallow portion of the Lincoln-Comet ore zone of the Lincoln Project, located on the California Mother Lode Gold Belt. The Lincoln-Comet and Keystone zones have a NI 43-101 compliant Indicated Resource estimate (completed in February 2008) of 612,400 tonnes (673,600 tons) grading 11.3 g/t Au (0.33 oz/ton) containing 223,000 ounces of gold and Inferred Resources of 2,161,700 tonnes (2,377,900 tons) grading 6.6 g/t Au (0.19 oz/ton) containing 458,900 ounces of gold.
Sutter currently controls approximately 3.6 miles of the Mother Lode of Amador County, with 90% of the property still unexplored. Potential exists both at depth and along strike of the known mineralized zones on both the footwall and hanging wall. The 120-mile long Mother Lode Gold Belt produced over 13 million ounces of gold historically with 7.9 million ounces originating from the 10-mile long segment between Jackson and Plymouth where the Lincoln Project is strategically located. Properties under the Company's control include seven historic mines with significant historic gold production totaling approximately 3.5 million ounces or 27% of the historic gold production from the Mother Lode. Historic mines located north and south of the Lincoln Project in the Jackson to Plymouth segment of the Mother Lode success fully mined gold to depths of 4,500 and 6,300 feet, respectively.
In Mexico, Sutter holds the rights to the geologically similar, high-grade El Alamo district of northern Baja, where historic mining to the water table produced mined grades of 30 to 60 g/t gold. Initial exploration with its joint-venture partner, Premier Gold, has demonstrated the extension of high-grade veins.