The Discovery Day Gold Property is located in Siskiyou County in northwest California near the town of Forks of Salmon approximately 65 miles southwest of Yreka. The claim block consists of 48 unpatented BLM mining claims controlling the prolific Knownothing mining district on over 950 acres of USFS land.
Up to 75% of the project can be acquired by Del Toro through a November 14, 2011 option agreement with Bowerman Holdings LLC.
Northwestern California is comprised of accreted terranes which form the Klamath Mountains geologic province. The Discovery Day gold property lies within the Eastern Hayfork terrane of the Western Paleozoic and Triassic Belt. Gold mineralization is present in a series of poorly exposed, sub parallel, narrow, mesothermal gold-quartz veins and fault gouge located adjacent and outward from the Youngs Peak pluton. Placer gold deposits are widespread in local drainages. Gold-quartz veins are typically narrow, ranging from 1 to 10 ft in thickness and commonly 1 to 4 ft in thickness. Visible gold is locally present. Ore grades range from 1 to 7 opt Au and are typically 1 to 3 opt Au. High-grade pockets of ore comprised of tens’ of ozs gold have been encountered.
Historical records of the Knownothing Mining District state the presence of high-grade gold ore deposits in at least six (6) major well-defined, quartz veins. High-grade gold ore has been produced over a vertical distance of 1500 ft. Potential exists for 40 to 50 ore shoots per vein system with ore grading 1+ opt Au and local high-grade pockets containing 10 to 30+ opt Au. Additional parallel veins are highly probable. High-grade gold is exposed in the underground workings of the Discovery Day mine.
More than 7 million ozs gold have been recovered from gold-quartz fissure veins and placer deposits in the Klamath Mountains province of California-Oregon. The first discovery of placer gold in the Knownothing district was made in 1850. Gold-quartz veins were later discovered in the Knownothing Creek drainage in the 1860’s with production underway by the 1870’s. There are six existing historical mines on the property – the Discovery Day, Star Hansen, Gilta, Peggy, Jennette and Knownothing. An early 1900’s article from the Scientific Press stated “The Gilta is two feet in width and will work $80 per ton (4 opt gold per ton at the then $20 per ounce gold price) Taking the cluster of mines as a whole, found on Knownothing creek, we predict at no distant day they will be rated among the most valuable plants on this coast” Combined historical production from these mines was 60,430 ozs gold. The Gilta was the second largest producer and the Knownothing the seventh largest the 33 reporting Salmon River mines. (Click here for the 1905 Yield of the Salmon River Mines report from Mineral Wealth)
Gold production extended into the 1930’s and was intermittent in the late 1970’s and early 1980’s. A mill report for a limited production period from September 5 through October 31, 1996 indicates over 2,350 ounces of gold worth $4M at a $1700 per ounce gold price was produced from ore that came from the “490” area of the Discovery Day mine. (Click here to view mill report and explanation)The Discovery Day mine was in full scale operations in early 2010. All mining, exploration and development work was suspended on May 28, 2010 due to a tragic mining accident which resulted in the death of the mining supervisor and the injury of another miner. The issues resulting from the incident have been addressed and the mine, while presently idle, is well positioned to re-commence operations. Del Toro plans to hire a new operator to run the mine which protects the new operation from any of the liabilities of the past operator.
Over $7M has been invested to date on development work since the 1970's at the gold property and the Discovery Day mine is turnkey ready for production. The property is fully permitted for gold production with the USFS with all environmental impact studies completed and reclamation bonds posted. All recent mining has focused on the Discovery Day mine with further exploration and geological work planned for the other mines on the property.
At the Discovery Day mine site there are approximately 2000 feet of underground workings on three levels with all utilities (air, water and power) in place and functional. Near the mine portal there is a miner’s dry with showers, mine office, supply house, compressor/generator building and two explosives magazines. All underground mining equipment, surface support equipment, and mine vehicles necessary for mining are on site and operational.
A 1.8 mile haul road connects the mine with a well equipped camp area and fully functional 100 ton per day gravity concentration processing mill. The 20 worker capacity camp consists of sleeping trailers, men’s and women’s restroom with showers, mechanics shop, fuel storage area and an administration building with a kitchen, lounge and two offices. The camp area is equipped with satellite television, internet and telephone, as well as full power and water systems.
The 100 ton per day mill was last operated in October of 2011 and consists of a crushing circuit with a grizzly, course ore bin, jaw, cone, screen and fine ore bin. The milling and recovery circuit utilizes a conical ball mill, vibratory screen, triple deck Deister table and a Wilfly finishing table. Also at the mill site is a lined water storage pond, two tailings ponds, a fully equipped assay laboratory and a gold smelting facility. Historical gold recoveries from the mill have averaged approximately 95%. Production costs are expected to run from $275 to $350 per ounce calculated from actual performance during recent past operations. With adequate mill feed, the Discovery Day gold property has the milling capacity to produce 10,000 ounces of gold per year.
Mining and Development Plan:
Under the Asset Purchase and JV agreements with Bowerman Holdings LLC, Del Toro is, in addition to other compensation, required to spend $1,500,000 on exploration, development and operating costs for the property as the earn in for the acquisition of its 60% equity in the property. The agreement outlines a work program focused on the two companies’ shared vision for the property. The three main goals of the work program are to:
1. Put the mine back into commercial production ASAP. The mine was fully operational until underground activities were suspended by MSHA in May 2010. Prior to the suspension, two areas of the mine, the 400’ and 490’ raises were producing ore which, based on sample assays, averaged approximately 1.25 ounces per ton. Del Toro plans to re-commence mining in these two headings immediately after addressing the pending MSHA issues. Based on previous mining efforts these two headings are expected to provide a steady source of quality ore for the mill.
2. Better define and develop the reserves and resources of the property. None of the 6 mines on the claims have ever been drilled and/or systematically studied so their ultimate potential remains unknown. Del Toro will design and initiate an extensive geological evaluation of the property including surveying, sampling and drilling. Success with this geologic program will provide a better understanding of all of the veins and potentially develop additional sources of ore for the mill to increase production capabilities. This geologic work will be done concurrently with the production mining efforts.
3. Acquire mining access to the major veins located on the property. An extensive surface survey was performed in early 2010 that indicated the end of the 400 cross cut in the lower Discovery Day workings is in close proximity to the prolific Gold Run and Hunter veins. These two veins reportedly produced over 50,000 ounces of gold from the Gilta mine. Historical maps show that these veins were never mined on the Discovery Day side of the mountain. Accessing these two veins via extending the underground drift at the Discovery Day mine will be a top priority for providing additional ore to the mill.
This property exemplifies Del Toro's company strategy to acquire historical high grade, near term production properties with relatively low operating costs. The company plans to put the mine back into production in the very near future and commence exploration efforts to better define the resources of the other mines on the property and the entire Knownothing district.