INTRODUCTORY REPORT
The Maginnis,
Spotted Horse,
Prepared by:
Jerry D. Hanley, Maginnis
Mine owner
Bruce F. Hinkley, Geologist
(406) 538-3820
(406) 380-0094 cell
hanley@midrivers.com
EXECUTIVE SUMMARY
The Maginnis, Spotted
Horse/Kentucky Favorite, and
Approximately 1,500 ounces of gold
and 25,000 ounces of silver are contained in old dumps and tailings. The most
recent published ore reserves range from measured reserves of 4,400 ounces of
gold in the Spotted Horse/Kentucky Favorites to speculative resources included
in all the properties of 311,000 ounces of gold. The high-grade telluride ores
of Gold Hill have been compared with those of the Cripple Creek District in
Good roads pass through the properties and utilities are in place. The Maginnis and Kentucky Favorite are accessed by rubber tired declines and the Spotted Horse by a shaft. Over the last 30 years there have been considerable improvements and infrastructure developed both underground and on the surface. Some heavy and light mining equipment is available.
Historically, ores were treated by
gravity, amalgamation, and cyanidation. A heap leach test in 1980 demonstrated
the ore cyanided well and a more recent cyanide vat leach plant achieved
recovery rates up to 90%. The cyanide ban that was legislated in
An extensive data package is available for review upon executing a confidentiality agreement. Once the properties are acquired the data could be further evaluated, an exploration program designed and permitted, and work begun. Exploration could be conducted from both the surface and underground with the intent of developing an underground mine(s). Key personnel are available to work on the project.
This is an
introduction and overview of the major mines of the Gold Hill Section of the
Warm Spring Mining District,
The properties, approximately 20
miles north of Lewistown, Montana, occur between elevations of 5000 to 5400
feet, near the center of the Judith Mountains and form a semi circle along the
southern, eastern and northern margins of the Gold Hill intrusive complex. They
are easily accessed from two directions, one of which is paved to within a mile
of the properties. A three-phase electrical power line traverses through the
Maginnis and terminates at the Spotted Horse. Telephone service is available.
The
Maginnis Mine is comprised of four patented claims totaling 35 acres and owned
by Mr. Jerry D. Hanley. There are other claims and lands adjoining the Maginnis
totaling approximately 230 acres that could be included in a land package. There are a number of water rights for the
Maginnis Mine owned by Mr. Hanley. There are no known encumbrances against the
property. The Maginnis Mine produced at least 100,000 ounces of gold and
150,000 ounces of silver from 30,000 tons of ore. This is an average grade of 3.33
ounces per ton of gold (opt Au) and 5.00 ounces per ton silver (opt Ag).
The most recent production in 1991 produced 151 ounces of gold from 56 tons of
ore (2.70 opt Au).
SPOTTED
HORSE AND
The
Spotted Horse Mine is comprised of two patented and 14 unpatented claims
totaling 210 acres. The patented claims are the Spotted Horse and Kentucky Favorite
and the unpatented claims are the Viking group. Mr. Patrick Henry and Mr. Dan Bauer acquired
this property in 2002. They own several water rights for the Spotted Horse.
There are no known encumbrances against the property. The combined Spotted Horse and
The
from 50,000
tons of ore. Little information is
available regarding the
AS A GROUP
The mines are on the same geologic
trend, share like ore bodies, and are contiguous yet only once in their
125-year history have they been under one management. The owners agree that the
properties can be best exploited if controlled by one operator and are
interested in entering into an arrangement to explore and develop the mines.
The
Maginnis is developed to a depth of about 450 feet. The Spotted Horse is
developed 750 feet below its discovery. The Kentucky Favorite is developed to a
depth of about 200 feet. The
GEOLOGIC
SETTING
The mines
are located along the contact zone between the Gold Hill monzonite porphyry
stock and the surrounding Paleozoic limestone. The stock appears to be an
intrusive and diatreme complex containing several
breccia pipes. Numerous faults and fractures are present. Mineralization occurs
in narrow zones along the contact breccias, in the limestone and along
fractures in the porphyry. The mineralization widens in favorable ground
associated with fracture systems, porous and permeable host rocks within the
breccias and sedimentary rocks and in solution openings. The primary ore, gold
and silver tellurides associated with fluorite and roscoelite, is oxidized in the upper levels of the mine.
Some sulfides are present in the lower workings. The telluride ores of Gold
Hill have been compared with those of the Cripple Creek District in
THE
MAGINNIS MINE
The
Maginnis was located in 1880 on outcrop that assayed over 38 ounces of gold per
ton. In 1881 the Maginnis Mining Company was formed and a mill built. The mine
operated until 1925 under several owners and lessees.
In 1980, a
sampling program was conducted on the historic dumps and tailings followed by a
cyanide heap leach test on 300 tons of the material. Approximately twenty
ounces of gold and an equal amount of silver were recovered from the test. By
1991, a 1,400 long decline had been driven from the New Works of the Maginnis
Mine and terminated under the main Maginnis workings. Over 500 feet of other
workings were developed off the decline. A small underground shop/office was
excavated and equipped, and a truck load-out was constructed on the
surface. A 100-foot adit was also driven
near the Maginnis/Spotted Horse property line.
From 1992
to date, Mr. Hanley has secured, maintained, and continued prospecting the
mine. He currently holds a Small Miners Exclusion Statement, an Exploration
License and bond with the State of
The
historic Maginnis Mine workings included approximately 1 ½ miles of drifts and
crosscuts, a main winze 225 feet deep, and thousands of feet of raises, winzes
and stopes. The Montana Workings, located south of the main workings, are
connected by a drift and two shafts that developed a body of lower grade gold
and higher-grade silver ore. In 1920,
a new ore shoot was discovered about midway between the main
Maginnis workings and the Spotted Horse. This became known as the “New Works”
of the Maginnis and had several adits and associated workings. About two-thirds
of the old workings are accessible.
THE SPOTTED HORSE AND
The
Spotted Horse was discovered in 1881 and worked by various operators until the
late 1930’s. Reopening efforts started in 1968 and sporadically continued until
1983 when sustained operations began, Chelsea Resources Ltd., being the most
notable (
The Kentucky Favorite Mine is
actually an extension of the Spotted Horse and its history is integral with the
Spotted Horse. A 1984 drilling program
on the Kentucky Favorite provided the information that later led
The
Spotted Horse early workings consisted of about 2 ½ miles of drifts and
crosscuts, a 450- foot vertical shaft, an 85-foot winze, and thousands of feet
of raises and stopes. The Discovery
shoot was stoped continuously from the surface to the lowest level, over 600
feet. Several adits explored and mined
the discovery outcrop ridge. The
Kentucky Favorite was developed from a few adits and shafts. In the early 1900s, a drift was driven from
the Spotted Horse to the
Recent
development included deepening the main shaft to Level 8 (550 feet deep),
extending the Level 8 winze to 120 feet below the level, collaring levels off
it and installing a muck load-out facility at the Level 8 shaft pocket. A
modern refuge chamber was constructed and a secondary escape built. In addition
to developing new workings, numerous workings were also developed on many of
the old levels throughout the mine. An underground shop was excavated between
the Level 1 adit and the shaft.
THE
The
Cumberland Mine was a later discovery than the other mines and developed near
the turn of the century. Around 1910, a large cave in hindered the operation.
It was last worked in 1918 and all access to the underground working has since
caved.
The property was acquired by a
local family and was idle until
in
1987.
MINING AND
MILLING
Historic
mining methods were similar in the mines. For the most part the ground stands
very well and requires little support. Open stoping using stulls and an
occasional pillar for ground support was the predominate mining method. Stope
width varied from approximately two feet to 50 feet. Modern day operations
utilized both rail and rubber tired equipment. Most ground was “open stoped”
using pillars and stulls for support and lagged for work staging. A modified
shrink stope was tried but soon emptied when the mill needed feed. Slushers
were used extensively for driving production drifts and removing ore from the
stope floors. Development headings were supported with timber or rock bolts.
All drilling was with jacklegs, stopers, and sinking
hammers. Natural ventilation provided good airflows in many of the workings and
fans were used as needed. Fresh air could always be found where new workings
intersected old workings. Enough water was encountered in the workings to
provide mine service water, yet not so much as to cause excessive dewatering.
Historic
milling methods were similar at the Maginnis and Spotted Horse. Initially the
ores were treated by gravity and amalgamation with generally poor recovery
(less than 60%). By the early 1900s, the cyanide process had been added to the
mills and recoveries of greater than 90% were achieved. After the advent of
cyanide extraction, the lower grades of ore could successfully be mined and
treated. The
The
Maginnis and Kentucky Favorite declines offer the most accessible major
underground workings at present. The
Maginnis decline has been idle for most of the period from 1992 to the present
and is in need of clean up and repairs. Upon completion of that work, the
decline would be ready to operate. Access into the old workings may require
some improvements.
The
Kentucky Favorite decline, idled since 1989, requires clean up and
miscellaneous repairs, not significantly more than the Maginnis. The stopes are
open for inspection. A preliminary inspection of the Spotted Horse shaft
indicates it would require moderate repairs. The Level 1 adit accesses the
shaft 100 feet below its collar. "A" Drift, originally accessed the
discovery, was mined in recent times and is open. In general, the underground
workings are in good condition.
Surface
facilities at the Spotted Horse include numerous empty buildings; the mill,
mine laboratory, office and change house, geology office, mechanics shop,
generator building, and trailer house (Mr. Henry’s residence). All equipment,
machinery, tools, and supplies are
gone except the piping, underground railroad, electrical
distribution system, pumps, and storage tanks. The complete hoisting facility
is present. Environmental monitoring wells are in place. Numerous roads and
trails traverse all the properties.
Messrs. Hanley, Henry, Hinkley and another individual have equipment
available including, LHD mucker, snowplow, backhoe/front end loader, crawler
front end loader, jacklegs, pumps, fans, and complete setup for fire and atomic
absorption assaying. An extensive collection of maps, reports, assays, and
other data is available.
Located on
the surface of the Maginnis are approximately 20,000 tons of historic dumps and
tailings containing 1,500 ounces of gold and 25,000 ounces of silver. A 5-ton
stockpile of 2.32 opt Au and 2.64 opt Ag ore is also present. While the gross
value of these dumps and stockpile is relatively small, it could provide the
opportunity to conduct metallurgical testing and at the same time provide some
production.
The most
recent ore reserves and resources were presented in a 1992 report by Viking
Exploration, Inc. which represents the potential of the Gold Hill properties
(silver reserves were not included). There are Measured Reserves of 4,400
ounces of gold at a grade of .49 opt Au in the Spotted Horse/Kentucky Favorite.
Indicated Reserves of 10,900 ounce of gold at a grade of 0.53 opt Au in the Spotted Horse/Kentucky Favorite and a small
portion of the Maginnis and
There are
good possibilities of developing high grade “direct shipping ore” that might
support a small operation; however, this is not the ultimate potential of the
mines. An operation designed to mine the rich grades that have been documented
during past mining, rather than large tonnages of lower grade, would be the
optimum goal. This could be targeted at 100 or more tons of ore per day.
Once the properties are acquired, compiling the existing
data should be completed (this work is presently in progress). The data should
then be evaluated and a geological engineering interpretation of exploration
targets developed. Once a program is designed and the necessary permits
obtained, exploration activities could begin. Drilling from the surface could
begin as soon as arranged. If exploration drilling is also intended from
underground then the declines and shaft should be renovated and drill accesses
and stations excavated as needed. In addition to the drilling, drifting and
rising on known mineralization could also define new ore. Once this phase is
completed and evaluated the next phase of exploration would be planned and
executed. It is not the intention of this report to discuss beyond the initial
phases.