COEUR D'ALENE, Idaho, April 25, 2014 (GLOBE NEWSWIRE) -- New Jersey Mining Company ("NJMC" or the "Company") (OTC:NJMC) today announced the purchase of the Red Elk claim group from Premium Exploration Inc. (TSX-V:PEM) ("Premium"). NJMC will hereafter refer to the property as the Eastern Star project.
The property consists of 13 patented mining claims covering 220 acres near Elk City, Idaho. The property includes the Bennett Lumber Company mill site, a former industrial site well-suited for mining infrastructure and facilities that includes industrial water rights and highway access.
The Elk City Mining District is an historic gold mining region dating back to the 1860's that supported more than 20 mines, including the Eastern Star, along with placer dredging operations. Modern exploration in the district by companies including Cypress-Amax, Kinross Gold, and Bema Gold has focused on near-surface bulk tonnage potential, while the many smaller-scale high-grade gold occurrences have largely been ignored.
At the Eastern Star, high-grade samples have been collected from three separate locations, representing nearly one-half mile of mineralized trend. Of 25 grab samples acquired by Premium in 2011, nine assayed greater than 0.493 ounces of gold per ton ("oz/ton") (16.90 grams of gold per tonne ("g/t")). Although the property was patented more than a century ago, very little exploration has ever been conducted on it.
NJMC President John Swallow stated, "This property acquisition provides us with considerable flexibility within our business plan. We have thorough knowledge of the area which lies within trucking distance to our mill in Kellogg. It fits our near-term objectives of evaluating high-grade systems for production potential as well as our longer-term vision of possibly building a new mill capable of servicing an emerging mining district as local operations are developed."
Pursuant to the agreement, NJMC will make $425,000 in cash payments to Premium for the property, beginning with a $125,000 down payment upon signing of a definitive agreement. NJMC will pay the remaining $300,000 in two balloon payments over the next 16 months, with the balance accruing interest at a rate of 5-percent.
NJMC also announced today the construction of a new circuit to recover gravity recoverable gold (GRG) or visible gold in ores processed at the New Jersey Mill in Kellogg, Idaho. The New Jersey Mill currently produces only a flotation concentrate. The addition of a gravity circuit is expected to produce another saleable product and increase overall gold recovery within the plant. The gravity circuit will initially be used to treat ores from the Golden Chest and is also expected to benefit the Company's custom milling business.
About New Jersey Mining Company
The new management team at New Jersey Mining Company (NJMC) is implementing a new business plan. NJMC is located in North Idaho's Silver Valley where it built and is the majority-owner and operator of a fully-permitted 360-tonne per day flotation mill and concentrate leach plant. The Company is actively engaging clients for custom milling contracts while also pursuing its own small-scale production opportunities.
The Company also owns a 47.88-percent interest in the Golden Chest LLC which controls the Golden Chest Mine, a historical gold producer with more than 12,000 feet of underground workings. Since 2003, more than $6-million has been spent on exploration, drilling, and development at the Golden Chest Mine, including more than $5-million by Marathon Gold since 2010. Golden Chest LLC recently leased a portion of the Golden Chest Mine to Juniper Resources, a mine development and production company.
The Company's common stock trades on the OTC Market under the symbol "NJMC".
Forward Looking Statements
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended that are intended to be covered by the safe harbor created by such sections. Such statements are based on good faith assumptions that New Jersey Mining Company believes are reasonable but which are subject to a wide range of uncertainties and business risks that could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements.