The Washington Mine

Location and History

The Washington Mine is located 15 miles northwest of Redding in Shasta County California.The Mine contains a series of under explored high-grade, mesothermal gold-bearing quartz veins. Historic underground mining at the Property’s Washington and Niagara Mines from 1852 through 1950 yielded an estimated 185,000 ounces of gold. During the mid 1990′s, private companies mined approximately 19,000 ounces of gold at the Washington mine from ore grading about 1 opt Au.Total gold production from all the historic mines on the Washington Mine property is estimated at approximately 300,000 ounces.

Property

French Gulch (Nevada) Mining Corp., a wholly owned subsidiary of Shasta Gold Corp controls approximately 1,800 acres of patented(private property)and un-patented mining claims.

Geology and Mineralization

The Project is within the central portion of the French Gulch Mining District, with historic gold production from placers and underground vein mining estimated at between 800,000 and 1,500,000 ounces. The district covers an area about 9 miles long in an easterly direction by about 1.5 miles wide. The district has been the largest gold-producing area in the Klamath Mountains province of southwestern Oregon and northwestern California, and it contains the highest vein gold grades in the province. Steeply dipping, mesothermal gold-bearing quartz veins occur within a section of greenstone and overlying black shales. Dikes are common along the veins and are locally mineralized and strongly altered. The veins contain variable amounts of free coarse gold, pyrite, arsenopyrite, galena, and sphalerite. Veins in the district are known to cover a vertical extent of at over 2000 feet.

Veins and Underground Workings

At the Washington mine, a series of at least six steeply dipping gold-bearing quartz veins occurs across a width of at least 800 feet and a strike length of at least 2,000 feet. Gold has been mined over a vertical range of 500 feet along ore shoots, but remains open at depth and along strike. A number of historic small underground workings were developed on 6 levels, covering a vertical range of about 450 feet, but most of the workings were driven along a single vein, the Washington. In 1990, a significant new vein, called the Lucky-7 was discovered. It was this vein that yielded the 19,000 ounces of high-grade gold in the mid 1990′s as noted above. The I Level intersected the east edge of the main Washington vein ore shoot, which is at least 675 feet long at higher levels in the mine. At its eastern edge, one stope yielded 649 tons grading 1.2 opt Au. French Gulch Nevada Mining Company. sampling in this area has recovered vein material grading as high as 3.8 opt Au.

The Niagara mine workings, 4,000 feet west of Washington, are inaccessible. One ore shoot was mined for 800 feet down dip.The main portion reportedly averaged 2.4 opt Au over 4-10 foot widths.

Potential

The recent discovery of the Lucky-7 vein in 1990, points to the significant exploration potential of the property as a whole. There has been very limited exploration drilling from surface and underground. The Washington and Lucky-7 veins in the Washington mine contain important ore shoots that remain open to depth. In addition, field evidence and historic data indicate that significant potential exists for additional high-grade veins on the property, particularly along strike of the Washington and Niagara mine areas.

In the recently mined Lucky-7 vein in the Washington mine, channel samples across the vein (collected by previous operators) showed consistently high grades over a strike length of 120 feet and a dip extent of 220 feet. Of 149 samples collected along the main ore shoot, the average grade was 2.79 opt Au across an average width of 4.6 feet and 78 of the samples graded above 1 opt Au.

Recent sampling and mapping by French Gulch Nevada Mining Corp. have been consistent with prior operators results. For example, an undeveloped vein within a dike 1,300 feet south of the Washington mine workings assayed 4.2 opt Au across 1 foot and represents a new exploration target. Several vein occurrences with minimal development 2,200 feet west of and along strike with the Washington mine veins suggest continuity along strike. Altered dikes and veining are exposed 1500 feet along strike of the Niagara mine veins. Surface core drilling in January ’06 intercepted three new veins at depth, which suggests multiple, parallel veins along the strike extension of the Niagara vein system.

During 2010 a historic adit known as the Heller  was sampled at both the entrance and 85 feet within the tunnel.  The vein exposure was 12-18” wide and assays .5 to 1.0 ounces per ton.  French Gulch Nevada Mining drilled two diamond core holes 300’ down dip on the Heller vein and intercepted 4 feet of over 2 ounce per ton in hole number one and two feet of .25 ounce per ton gold in hole two.  While further drilling and sampling need to be done to confirm the importance of both holes, there is a strong indication of a new ore shoot on the historic Heller vein.  This illustrates the geological potential of one of many historic mines at the Washington mine complex.

Mine Development

French Gulch Nevada Mining Corp.began an aggressive program of underground core drilling and surface reverse-circulation drilling in January 2005. This was to test the down-dip projection of ore shoots at the Washington mine as well as to test for vein extensions along strike. In December 2005, construction was started to install the 1550-foot long underground decline access tunnel, which serves as the main production access. The decline provides access to the previously drilled Lucky 7#, #2, Santa Maria,Dean, and Washington veins.
During 2006, access was gained to the 2153 level on the Lucky 7 vein to allow test mining of ore. During 2006 1,281 ounces of gold was produced from a combination of low grade development ore and high grade vein material.

During 2007, important development projects were completed. A new 432′ crosscut was driven from the main declines in a northern direction to crosscut the Washington/Dean veins(Washington Crosscut). High grade gold mineralization was encountered in several previously unknown veins. A decline was driven east from the end of the Washington crosscut for 256′ and connected to the existing I-Level to provide a second exit as well as allowing discharge of ventilation air. Several exploration drifts followed the Washington and Dean veins and two new ore shoots were developed.

In October of 2007 the mining method was improved by using narrow vein mining methods to minimize the mixing of waste rock with ore (dilution). This resulted in an immediate, significant increase in ore grades. From Oct 1st through Dec 31, 2007, the head grade of ore from the mine increased to .68 ounces of gold per ton. During 2007, 5,858 ounces of gold were recovered from 15,284 tons of ore.

During the 1st Quarter of 2008, exploration and development continued at the Washington Mine. Almost one thousand ounces of gold were recovered from 1,424 tons of ore resulting in an average head grade of .775 ounces per ton . During 2008 the mine produced 3.871 fine oz. of gold from 5,649 tons of ore from a recovered grade of .685 per ton or a head grade of .753 oz. per ton at an average recovery rate of 90%. During 2009 the mine was on care and maintenance.

In the Fall of 2010, under new ownership underground development resumed at the Washington Mine.  During 2010 and 2011 important improvements underground included a new electrical service with substations, underground shotcrete plant and ventilation improvements.  Development highlights include:

  •  2145 raise to explore known ore shoot.
  • 5060 raise to explore recently discovered 5060 ore shoot
  • 275 cross cut and raise
  • New drift levels in the 371 raise
  • De watering and rehabilitation of the I level decline
  • Over 5,000 feet of underground core drilling to further define targets in the 5060 and Lucky 7 ore shoots
  • New water treatment plant

Underground development has been hampered  by the unprecedented Global metals mining boom.  Skilled underground miners continue to be a scarce commodity and French Gulch Nevada Mining  development programs have been delayed as the labor shortage continues despite that we are steadily building our underground team and currently employ forty at the Washington Mine with twenty underground miners.

In 2012 French Gulch Nevada Mining Corp. needs to advance development ahead of mining enough to create 14 active working stopes and achieve commercial production.  The first commercial production goal is approximately 17,000 ounces of gold per year and a slow increase as deposits like the Heller, Scorpion, Niagra and others are explored, developed and brought online.

Important ongoing development projects in 2012 will include the I-Level decline west drift, the Lucky 7  Sub-level ramp, and the 371 decline.

Mill

There is a 100 tpd mill on the property that was refurbished and improved in 2006. A new crushing plant was installed during 2006. The mill circuit consists of a jaw and cone crusher, two Denver ball mills, flotation and gravity concentrators, a tailings thickener and concentrate filters. The mill is in good operating condition and gold recoveries are above 90%. In the future, mill tailings are proposed to be mixed with concrete(paste backfill) and used as ground support in the mine. The mill has a crushing circuit conservatively rated at 240 tons per day and the rest of the mill could be up-graded to 240 tons per day with additional investment. Gold production is approximately 60% in dore bars sold to a refinery and 40% in gold concentrates sold to a smelter.

During 2011 the mill processed 6,150 tons with an average throughput of 4.2 tons per hour and a recovery of approximately 95 percent.  Important improvements to tailings handling, Ball Mill Drive and recovery equipment were completed.  The mill operated at over 92 percent availability to the credit of our knowledgeable and hard working processing crew.  The mill was operated 40 hours per week in 2011.  As ore availability increases the mill will be operated additional hours per day and days per week.

Environmental Permitting

The Washington Mine is a fully permitted mining operation.  During 2010-2011 the mine obtained a NPDES permit from the Water Quality Control Board allowing discharge of treated water to land or to the creeks.  Additionally the project was granted a Title 27 waste to land permit allowing the long term storage of mine tailings and the construction of new rubber lined tailings storage units.  During 2011 the existing SMARA reclamation plan was updated and re-submitted to Shasta County and the revised plan should be approved in 2012.  The current plan remains in full force.

A show piece of the operation at the Washington Mine is the “State of the Art” water treatment plant installed in 2010.  Discharged water meets or exceeds all applicable County, State and Federal Standards and is so clean it can be put directly into the creek.  The water discharged is much cleaner than the natural creek water.  Shasta Gold Corp. is committed to being a good steward of the land and a considerate neighbor to the community.

 

Future Plans

Our current goal is to get the Washington to Commercial Production and then start to develop other “look alike” deposits on our property and within the district.  The value of our existing facility can be leveraged by treating ore from additional veins.  This “Hub and Spoke” approach could lead to a doubling of production from forecasted levels.  French Gulch Nevada Mining is evaluating other opportunities within the district but not part of our property and we hope to acquire one or more additional properties in 2012-2013.