CEO Blog - August 31, 2011
Wednesday, August 31 2011 18:01
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Production Update Blog

Question: We understand from your Form 10-Q filings that the Goodfellow Corporation of Boulder City Nevada, is assembling, delivering and installing a new, two-stage crushing facility, and that Scotia International Inc. of Nevada is refurbishing and upgrading your Merrill-Crowe processing plant and refinery.

Can you please provide a progress report towards the above activities?

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Answer:  Regarding the Crushing facility, construction by the Goodfellow Corporation remains on schedule.  Last Thursday, August 25, 2011, Mark Goodfellow was on site, inspecting the site for delivery of most of the equipment and to review plans for the installation of the crusher. Mark also updated us on the schedule, including that the fabrication of the jaw crusher will be complete this week and it will be delivered to Goodfellows for installation into the skid-mounted framework.  The cone crusher, surge bin, and the vibrating screen will also be completed this week and delivered to the mine site next week.  Work continues on refurbishing our existing wobbler feeder and conveyors. The rebuild of the used wobbler feeder is about 25% complete.

Today, we received our KPI-JCI 36” x 150” Super Stacker Conveyor Belt System.

 CMI_SuperStacker

CMI_SuperStacker-USA

 The stacker is extendable from 75 to 150 feet and includes1000tph upgrade options.

The Merrill Crowe facility, construction and refurbishment by Scotia also remains on schedule. To date, Scotia has completed the following: construction design for the Deaeration Tower (and commenced fabrication), Zinc, Pre-coat and Body-feed Skids; scheduled fabrication for the Zinc and Body-feed Skids; disassembled and sandblasted all of the filter presses and clarifiers; primed and painted the filter presses and requested quotes for the new pumps and agitators.

The Company is also soliciting bids for the construction associated with the Merrill Crowe building and foundation expansions.

These items continue on schedule and will be completed prior to the issuance of a few remaining permits, primarily the Air Quality Permits issued by the Nevada Division of Environmental Protection (NDEP).

We previously announced that on July 27, 2011, the Company received its Mercury Operating Permit #AP1041-2690, issued under a new air quality program that is administrated by the NDEP’s Bureau of Air Quality. This permit requires all gold mining companies that use thermal processes for gold recovery to monitor and manage, through engineering controls, any mercury fumes or liquid metal that is derived from the precious metal ore as a by-product.  This air permit ensures employee and public safety during the final stages of precious metals recovery.  This permit is now effective and has successfully passed through the appeal period.

The Company has also applied for an Air Quality Permit, primarily associated with the crushing facilities mentioned above.  This permit, which is also issued by NDEP, is required before any mining and processing can recommence and will require a public notice period identical to our recently issued Mercury Operating to Construct Permit, making issuance most likely in late October.

Production activities cannot commence until we have received this permit.

Over the past eight months, the Company has hired a number of experienced mining professionals. These key additions to our staff brought demonstrated skills and experience, including safety, environmental, operations management, mine engineering and metallurgical experience, which will be invaluable as we prepare for pre-production and mining production.

Between the increasing of staff and the purchasing of equipment, we continue on target toward our production goals.

 

Kindest regards,

Corrado De Gasperis
President and CEO