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Discovery Minerals Provides Update on War Eagle Oro Fino Gold-Silver Project

Discovery Minerals LTD, the precious metals exploration and production company, is pleased to announce the progress of the assessment of the War Eagle Oro Fino Gold-Silver Project in Idaho, USA.

The Oro Fino vein is the first target of three major vein systems at War Eagle Mountain. Discovery Minerals along with their joint venture partner Murphy Noble Metals have commenced mining operations and recently completed an additional geological review and geochemical reconnaissance sampling program at their War Eagle Mountain project in Idaho.

Key Points about the Discovery Minerals War Eagle Mountain Project;

·       Mining operations, including uncovering old workings progressing.

·       Project geologist has carried out reconnaissance mapping & sampling of the Oro Fino Vein.

·       The vein system is up to 150’ wide consisting of hanging wall and footwall veins, with intervening weathered and altered granodiorite with quartz veinlets.

·       Accessible open-cut type drill target for oxidised ore establish in the central 2000’ length making an immediate drill target of 2000’ by 150’.

·       Oxidised weathered ore can probably be beneficiated by screening out host rock improving grade as well as cutting trucking and processing costs.

·       Old adit workings in the north could yield access to lower levels of the mine/vein system toward the base of the Oro Fino shaft, where less mining has occurred.

·       Dump and rock sampling of 83 samples collected and assays pending in two batches.

·       Waste dump assays will be used as grade control to establish which dumps can be trucked or further beneficiated for short term gold production.

·       Given that old mining technologies were likely the cause for high cost of production causing mine closures when host rock became excessively hard and metallurgical processing & extraction became less efficient with deeper ore containing sulphides, provides additional opportunity with implementation of modern mining technologies.

·       The project has open cut and underground resource potential that could well exceed previous production of ~350,000-400,000 ounces gold equivalent.

The Discovery Minerals and Murphy Noble Metals Joint Venture recently completed an expanded geological review and geochemical reconnaissance sampling program at their War Eagle Mountain identifying increased resource potential. The program covered a 4500’ long section of the Oro-Fino structure. Reconnaissance has confirmed that the Oro-Fino vein is in fact composed of two parallel lesser veins that have been variably worked for gold and silver over much of the entire length. These two main veins are up to 150’ apart. The veins are hosted by a weathered granodiorite, with occasional basaltic and rhyolitic dykes present. Minor sub-parallel anastomosing and cross cutting quartz veinlets occur along each vein set as well as between the two main vein sets, which in some areas were mined in their entirety as small open cut workings using 1800s technology .

The photograph of the west vein open cut near the Oro Fino shaft shows a long slot that was removed for a length of 330’ and up to ~25’ wide. It is apparent that the working does not connect to stopes below, which supports the view that the area is an excellent drill target, which forms part of the 2000’ central strike portion that forms an immediately accessible drill target for the potential open cut resource assessment planned for this exploration season. An RC drill target of 2000’ by 150’ is therefore envisaged.

One of the key aspects for the gold-quartz veins occurring within the weathered zone of the potential open cut envelope is the highly weathered nature of the host rock, which means that the ore could be further upgraded by beneficiation through screening out the weathered granodiorite. This host rock is very friable and would be ‘free dig’, without the need for explosives making a further lower cut-off grade possible than normal hard rock open cut operations.

Reconnaissance also established that the gold workings were more extensive than previously recognised, with hitherto unknown adits being discovered in the northern section of the company’s tenements. These old adits are significant as they are on a north facing slope and they all therefore tunnelled south toward the main workings of the Oro-Fino shaft which reached 350’ deep. The elevation of some of these lower adits is similar to the bottom of the Oro-Fino shaft. It is likely that these tunnels would not have reached the Oro-Fino shaft due to the restricted tenement holdings of the various companies that operated during the 1860s. The newly discovered adits, if refurbished and extended would give Discovery Minerals access to the lower reaches of the old Oro-Fino shaft workings about 1600’ south. Drilling prior to mine development is envisaged to establish resources in the nearby area. This area is to the right of the long section shown below.

The long section also shows that the majority of the mining stopped at 6750’ above sea level. It does not however show the west and east vein systems. It is interesting to note that the stoping was generally continuous throughout the upper levels thus proving that a consistently rich ore existed. The reasons suggested by old reports are a combination of the Oro Fino veins being no longer surface supergene enriched and oxidised thus allowing simple metallurgical treatment and the host granodiorite becoming increasingly hard. Technology of the day when the mines operated was all hand tools and working in a hard granodiorite fresh rock environment that would have necessitated a very high ore grade. This would account for the two ounces per tonne production grades from the deep Mahogany shaft, where mining costs would have been very high using such methods in very hard rock. Such 1800s issues are no longer a problem with modern technology. The area below these workings therefore constitutes an important exploration target, which can readily be assessed by diamond and RC percussion drilling.

Furthermore, the Mountain Chief vein occurs about 270’ east of the Oro-Fino vein and some sampling has taken place. Very little historical information is available about this vein; however, it offers a potential extra ore source within the project.

Rock sampling has taken place along the entire length of the Oro Fino veins and has so far gathered 83 samples of various material including quartz vein outcrops and grade control of the old waste dumps. These assay results are pending with the first batch nearing completion. The return of the assay data will aid the company’s short to mid-term strategy for gold and silver production and exploration drill targeting.

As part of this strategy for near term production there are a large number of waste dumps on site that have significant overall tonnage which could be suitable for a small to medium scale operation. These dumps may still contain economic gold grades if processed in a suitable manner and sampling of these dumps has already taken place. Given that the historic production costs were around one ounce per tonne for the ~400,000 ounces produced then there is likely excellent material available in the waste dumps. The company is also investigating means of beneficiation for these waste dumps as well as through screening, as discussed earlier in addition to modern ore sorting technology. Sampling of the waste dumps has been based upon taking this into consideration.


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