North Bay Resources Inc. ("North Bay" or the "Company") today updated investors on operations at its Fraser River Project near Lytton, British Columbia. The update included expanding the size and scope of the property by more than 65%.
"The excavation of test pits at the Fraser River Project began on schedule earlier this month, and a series of test pits has now been completed. Reports from the field describe the results as excellent," said Perry Leopold, CEO. "The relative ease of separation indicates that gold recovery should be at least 75%, which with optimization and fine-tuning of the mill is expected to approach if not exceed 90%. Each yard of material is yielding a consistent amount of visible gold in each location. The presence of platinum group metals such as platinum and palladium, in addition to recent indications of iridium and rhodium, is expected to increase the value of the precious metals concentrate."
The Company is also pleased to announce a significant expansion in the size and scope of the Fraser River Project with the acquisition of four additional claims covering more than 400 acres, an expansion of the project land area exceeding 65%. The Company notes that when it first applied for mining permits in November 2011, the Fraser River Project consisted of four claim units covering 248 hectares, or 612 acres. Since that time, and as recently as November 15, 2012, North Bay has staked additional ground covering a total of 408 acres, all of which is contiguous and adjacent to the Fraser River claims that are covered by the current mining permit.
Because these new claims were not included in the original permit applications, the current mining permit will have to be amended to include these new claims before test pits can be excavated on the new ground. As well, some of the most prospective ground on these new claims, which covers more than four square kilometers, is over one kilometer on a direct line from the Fraser River. This puts the issue of water rights front and center, as the use of available water from nearby streams is deemed far more efficient compared to the cost of pumping the amount of water required for mining operations over a distance of more than one kilometer from the Fraser River.
To secure the necessary water rights, including the right to enter certain private lands that might overlie our claims, the Company has recently held discussions with the private landowners in the area. As a result of these meetings, and as set forth in the Company's Current Report on Form 8-K filed with the SEC on November 28, 2012, an interim agreement effective through the end of the year has now been signed with the private landowners. The parties have also agreed to use this interim agreement as the foundation to continue negotiations on a longer term agreement that will enable the Company to pursue extraction of ore on an increased scale, which all parties recognize to be the Company's primary goal. A licensed surveyor will be engaged to determine the precise location of any private lands in relation to our mining claims. This should eliminate any potential dispute in the future as to where the boundaries of our claim areas and associated mining rights intersect with private lands and their associated water rights.
Once these surveys are completed, the Company will file an amendment to its Plan of Operations with the Ministry of Mines to update the mining permit, which will then also include the newly acquired claims. This survey will serve a dual purpose, as it will then allow the Company to also file an application with the Ministry to convert its claims to a mining lease, as the principal element of a lease application is the submission of a formal survey to precisely delineate all claim boundaries. The advantage of conversion from a group of claims to a formal lease is to eliminate any statutory limitations to the amount of material North Bay can mine and process annually. Under BC mining regulations governing the current permit, placer mining claims are limited to the processing of up to 20,000 cubic meters per year per cell claim. Upon conversion of the claims to a lease, there is no longer any statutory restriction or annual limitation as to the amount of material the Company can mine and process. Accordingly, the Company believes it is beneficial to begin the survey work now rather than deferring it to a future date.
About The Fraser River Project
The Fraser River Project is located near Lytton in south-central British Columbia, Canada, and covers 1,020 acres of placer claims extending approximately 4.5 kilometers along the Fraser River. Recent assessments indicate assays up to 5.68 grams per tonne gold and 0.427 grams per tonne platinum. A mining permit has been issued and a reclamation bond is in place.