| Question: Are you only allowed to do exploratory drilling (and not mining?) on only 10 acres at a time? The residents have filed an appeal to the decision by the planning commission whereby they unanimously recommended approval of your permit request for expanded mineral exploration drilling rights. If you win the appeal, how are you going to make any money only being able to work on 10 acres at a time?
Answer: Thank you for your question regarding the Special Use Permit (SUP) application for expanded mineral exploration rights in the southern portion of our land holdings in Storey County. It should be clarified that this exploration permit application is separate and distinct from our existing SUP in Storey County for mining and processing.
The mineral exploration SUP (t#2011-016) was unanimously approved by the Storey County Planning Commission on August 16, recommending approval by the Storey County Board of Commissioners on October 4. This SUP would authorize an expanded drilling program primarily in the Lucerne Resource Area and our broader American Flat properties. The disturbance allowance for this permit is synchronized with our existing state bond, subject to its modification, that provides, among other things, for drilling and reclamation of drilling related disturbances. Drilling related disturbances on private land in this area are currently limited to 10.66 acres before requiring reclamation. These limits are bonded with the state. Increases to these levels require state approval and, most likely, additional bonding. Drilling related disturbances on public lands are regulated by the Federal Bureau of Land Management (BLM) and will be limited to 4.17 acres (that will be separately bonded with the BLM) under a federal drilling Notice. The Notice procedure requires the BLM to evaluate the specific drill locations to ensure that any impacts to these land are minimized and corrected through post drilling reclamation activities.
An existing SUP, (#2000-222) regulates the mining we plan on initiating when we receive our Air Quality Control Permit from the State of Nevada. Within the boundary of this existing SUP 2000-222, our disturbance is not limited to 10.66 acres, as we are permitted for more than just drilling but for mining, processing and related activities. These activities are also bonded by the State of Nevada and, in total, represent over 133 acres of planned, mining related activities. The following map delineates the various existing and proposed permitted project boundaries.
Again, the new drilling SUP #2011-016 does not have any authority over our mining and processing operations. The SUP will permit efficient, safe and expanded drilling activities, primarily in the Lucerne Resource Area, we have discovered significant mineralization (that is, gold and silver) to the north, east and northeast of our Starter Mine. We hope this development will identify much larger resources in this area that would support our plans for growth.
Corrado De Gasperis
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