North Bay Resources ("North Bay" or the "Company") is pleased to announce that mining operations are now commencing at our Fraser River Project in British Columbia.
The Fraser River Project is located near Lytton in south central British Columbia, Canada, and covers approximately 4.5 kilometers of placer claims along the Fraser River. Recent assessments indicate average assays of 2.303 grams per tonne gold and 0.096 grams per tonne platinum, with assays as high as high as 5.68 grams per tonne gold and 0.427 grams per tonne platinum. A mining permit has been issued, and a reclamation bond is in place.
Heavy equipment, including excavators and loaders that had been prepositioned over the summer above Lytton, BC, is now being deployed on-site. The custom mill and pump systems are expected to arrive on-site and be assembled early next week. The initial work will consist of excavating a series of test pits to depth, and then processing the material through the mill to measure and optimize the gold recovery rate. The mill in use is a gold recovery plant with a processing capacity of 10 to 20 yards per hour, and which can be expanded to up 100 yards per hour once the decision is made to begin full production. The production decision will be based on the results of the metallurgical testing that will measure and determine the recovery rate of the resource.
The initial target area to be mined is approximately 575 meters in length, 120 meters wide, and an estimated 75 meters deep. It is therefore estimated that the deposit in the initial target zone contains approximately 5,175,000 cubic meters of material, which equates to approximately 7,762,500 metric tons. Much of this area consists of acres of boulder fields that were left behind as the residual waste product from hydraulic mining operations along the Fraser River a century ago. Part of our planned mining operation consists of simultaneous reclamation work, as the boulder fields are cleared to gain access to the gravels below. The intent is to return the ground to its natural state before having been scarred from the aforementioned hydraulic mining process used by the early miners, such that by the time we are through mining, what had been fields of boulders will be converted into hayfields, orchards, and vineyards for the benefit of the local farming community.
The Company notes that our mining permit currently allows the processing of 20,000 cubic meters of material per year per cell claim. As the initial target deposit extends across several cell claims, our allowed limit will likely be approximately 60,000 cubic meters annually. As we proceed forward and find that the extracted material remains consistent with the average grade we have estimated thus far, we will apply to have the claims converted to leases, in which case there would be no statutory limit to the amount of material we can process annually.
In a related development, as previously announced in a Company press release dated August 21, 2012, North Bay and P. Wright Contracting Ltd ("PWC") have been working on completing a definitive joint-venture agreement following the approval of our mining permits. The Company presented its final draft of the contract to PWC last month, but it has remained unsigned. For a variety of reasons, the privately-owned PWC has thus far been reticent to accept the obligations and audited financial reporting requirements assigned to the project operator as outlined in the agreement, and as of this date the parties have been unable to reach an accommodation that is satisfactory to both parties. In the interim, PWC has offered their services as an independent contractor to move the project forward. As all equipment had been pre-positioned since July and PWC has been prepared to begin operations immediately, the Company has accepted this interim arrangement, during which time the Company will retain its 100% undivided interest in both the property and the production potential of the project for the duration.