"We have received many more solicitations and preliminary purchase orders for custom
milling since the first of the year than we ever anticipated. We
believe that accelerating re-activation of the Pride of the Wes
Mill is a wise strategic move, particularly as the uncertain economy
forces other mining companies to roll back their plans." John
Ferguson, Director of Operations for Colorado Goldfields.
A report by Robert Larson of Monadnock Mineral Services reveals
that one of the properties generating ore for Colorado Goldfields to
mill consists of approximately 800 acres of patented mining claims,
from which significant gold has been produced. Surface and underground
mapping and sampling was conducted along with approximately 43 core
drill holes.
Analysis estimated potential gold resources of 344,000 tons of 0.41
ounce per ton gold as “near-term” targets, and 780,000 tons of 0.40
ounce per ton gold as ´intermediate-term´ targets. ´Near-term´
targets are defined as those adjacent to, or within several hundred
feet of existing mine workings, whereas ´intermediate-term´
targets were up to 4,000 feet to the east of the existing workings.
One of the drill holes in the ´near-term´ targets encountered
70.7 feet of 0.127 ounce per ton gold, with one interval of 3.8
feet of 1.262 ounce per ton gold. One of the drill holes in the
´intermediate-term´ targets encountered 7.2 feet of
0.368 ounce per ton gold.
Larson went on to say, "This is an ideal venture for a small
to medium-sized mining company to begin development and initiate
test-mining with custom-milling within the existing mine workings.
These properties have the potential of producing 400,000 ounces
of gold from near and intermediate-term.
"Preliminary purchase orders for custom milling projects could bring us to
$2,000,000 per year in gross revenue very quickly, and over $9 million in 3 years"
- C. Stephen Guyer, CFO for Colorado Goldfields.
The Pride of the West Mill is a modern gravity, flotation and cyanide leach mill located on 120 acres, with offices, laboratory and water rights. The Mill has the capacity to refine up to 700 short tons per day. The Brooklyn and King Solomon mines are all within a nine-mile radius of the Pride of the West Mill with good roads connecting the mines to the mill.
Colorado Goldfields acquired the Pride of the West Mill for $900,000 and the assumption of $300,000 in reclamation permit bond requirements. The mill was valued over $12M. Historically, milling operations in Southwestern Colorado similar in scope to the Pride of the West Mill have generated from $5 million to $15 million annual gross revenue and typically are profitable in the first year of operations
Re-activating the assay lab at the mill includes the installation of an electronic microbalance for weighing the doré (semi-purified gold), beads derived from the fire assay and the gold bead remaining after the silver in the doré is dissolved, and an inductively coupled plasma atomic absorption spectrographic machine.
"Mining companies are facing unacceptable delays in getting assay results, sometimes as long as 60 days. Operating our own lab and offering those services to neighboring mines is a bonus to our clients and gives a boost to the bottom line." - C. Stephen Guyer, CFO for Colorado Goldfields.
