Sutter Gold Mining Inc. (TSX VENTURE:SGM) ("Sutter" or the "Company") is pleased
to provide an update on the development efforts for the Lincoln Mine Gold
Project ("Project").
Surface Construction and Scheduling
Sutter is completing final designs, final construction documents and contractor
selection to allow for the construction of surface facilities to begin in
September 2011. Sutter has obtained approval from the Amador County Land Use
Committee for preliminary architectural plans for the mill complex and
shop/staff services building and ancillary structures. The Company has obtained
a demolition permit to remove existing temporary structures and allow for the
construction of new surface facilities. The Company has obtained approval of
construction-level plans and specifications for the two mine waste units, the
Waste Rock Pile (WRP) and Surface Fill Unit (SFU) that will be used to store and
dispose of development rock and mill tailings, respectively.
Sutter and its consultants are finalizing construction-level plans and
specifications for certain earthworks, the mill complex, shop/staff services
building and ancillary structures. These construction-level designs will be
used to obtain building and grading permits, as appropriate, to solicit bids
for contractors and complete the contractor selection process for surface
facilities. The Company has established the following September milestones
necessary to complete the final engineering and design work and file for
construction permits:
-- Water supply line for fire suppression
-- Grading plans for the Tailings Processing Area, SFU access road and
employee parking
-- Building plans for the Shop/Staff Services building
-- Building plans for the Mill Complex
The Company initiated the contractor selection process for surface
facilities and improvements on August 3rd when a pre-bid walk-through was
conducted with local general engineering, excavation and concrete
contractors. The walk-through was attended by at least 8 contractors with
several indicating interest in bidding for the work following the walk-
through. Sutter has established the following September milestones related
to contractor selection and award:
-- Demolition of existing temporary structures contract award and job
completion
-- Excavation and grading contract award for the Tailings Processing Area,
SFU access road, employee parking and WRP construction and job start
-- Installation of fire suppression water supply line contract award and
job start
-- Shop/Staff Service Building construction contract award
-- Mineral Processing Facilities contract award and excavation start
Mine Schedule and Sequencing
Final review of the stope targets and sequencing with the input of newly
appointed VP - Exploration and Geology, Steve Zahony is underway. This study
will finalize the initial 13 stope panel targets and provide the final schedule
to be included in the mining contract documents. To date, 17 potential mining
contractors have been contacted, evaluated and ranked according to
qualifications and availability. Of those, six candidates have been selected for
inclusion in the contract bidding process. The underground mining contractors
pre-qualified for the bid process include in no particular order; DMC Mining
Services, Mark A Suden Mining Construction, Zereko Mining, Dumas Contracting
Ltd., Mining and Environmental Services LLC and Procon Mining & Tunneling,
Sutter and its consultants are drafting bid documents for the underground work
including pre-production development work and production mining. The Company
plans to complete bid documents for the underground work by October. This will
allow ample time for the anticipated six months of pre-production development
work planned to begin by year end.
Equipment Procurement and Related Savings
Sutter has purchased or secured by deposit major components, new and used, of
the milling and select mobile equipment for the Project and has taken delivery
of several items. The evaluation and selection of used equipment has been
conducted with quality assurance/quality control as a guiding principal by
Sutter and its consultant, Paul E. Danio Associates, an experienced mill
designer, fabricator and operator. The following table summarizes major
equipment purchases and associated savings to date. Based on the evaluation and
selection process Sutter estimates that there will be approximately $65,000 in
residual used equipment refurbishment costs and delivery charges yet to be
incurred and not included in the table. To date the Company has purchased or
otherwise secured equipment representing approximately 25% of the equipment
budget. Cost savings realized to date for the capital equipment purchases are
significant, at approximately 40% below budget. Sutter is sourcing and acquiring
additional equipment as necessary.
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Lincoln Mine Project Equipment Savings to Date
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Budget Actual Savings
Item ($US) ($US) ($US)
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12"x36" Pioneer Jaw Crusher 21,500 17,000 4,500
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3'x8' Vibratory Screen(i) 6,500 - 6,500
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4'x12' Belt Feeders (3) 36,000 28,500 7,500
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6'x12' Marcy Rod Mill, complete 80,000 40,000 40,000
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Krebs 10"x4" Hydrocyclone 7,500 3,500 4,000
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Denver Equip Co. Flotation Cells (6),
complete 130,000 45,000 85,000
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3'x12' Marcy Regrind Ball Mill, complete 15,500 15,000 500
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6', 6 disk Denver Co. Disk Filter 72,000 70,000 2,000
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Assay Laboratory Equipment (90%
Complete) 150,000 60,000 90,000
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Ingersoll-Rand 750CFM Electric Air
Compressors (4), complete 80,000 70,000 10,000
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Cat 938 Front End Loader 140,000 85,000 55,000
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Site Support Vehicles 26,000 24,300 1,700
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Total 765,500 458,300 306,700
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(i) included with jaw crusher
Permitting
Sutter continues to focus on the remaining permitting activities with particular
emphasis on updating existing permits for changes in operations and equipment,
construction-level permits (demolition, building and grading permits), air
quality permits and the federal Clean Water Act Section 404 Permit and related
permits and approvals to fill waters of the U.S.
With respect to the Section 404 Permit required to fill approximately 0.75 acre
of waters of the United States, the Company submitted an application to the
Sacramento District of the U.S. Army Corps of Engineers (USACE) in March, 2010.
The USACE published the required public notice on June 17, 2011 to solicit
comments from responsible agencies and interested parties. The USACE received
only four responses including the US Environmental Protection Agency, which had
no substantive comment, two adjacent landowners and one citizens group prior to
the close of the public comment period on July 16, 2011. The Company, along with
its consultants are working with the USACE to finalize the permit documents and
obtain the Section 404 permit. In addition, the Company is working with other
Federal and California State agencies with which the USACE consults or requires
approvals to complete their process including routine water quality sampling and
a tree survey of the minimal area to be impacted by the Project.
The Company retained SCS Engineers ("SCS"), a nation-wide firm with expertise in
air quality permitting, to assist in obtaining the required Authority to
Construct permit (ATC) for the project. Having completed a preliminary analysis
of potential air quality impacts and permit requirements, the Company and SCS
scheduled a pre-application meeting with the Amador County Air Pollution Control
District (ACAPCD) in July 2011. Based on direction from ACAPCD and their
consultant, Sutter is working with SCS to complete and file an ATC application
by the end of August 2011. The ACAPCD has indicated that once the completed
application package is submitted, they will carry out a completeness review
within 30 days resulting in expected issuance of the ATC permit within
approximately 60 days of the application submission.
As stated previously, Sutter obtained approval of preliminary architectural
designs for the Mill Complex, Shop/Staff Services Building and ancillary
structures from the Amador County Land Use Committee that allows final
construction-level plans to be completed. Through the review process Sutter
worked closely with the Committee, County Planning Staff and the public to
provide information, including samples of building materials to demonstrate that
the designs and materials were consistent with the existing Conditional Use
Permit for the Lincoln Project. This permit imposes specific requirements on the
structures as they are located in an area of historic mining and visible from
Old Highway 49, now a County road.
On August 10, 2011, Sutter received an amended Permit to Use Diesel Engines
Underground from Cal-OSHA's Mining and Tunneling Unit. The Company had requested
the amendment to remove certain equipment no longer used at the site and to add
recently acquired mobile equipment. Although not requested by the Company,
Cal-OSHA's Mining and Tunneling Unit also favorably amended the Underground
Classification for the Lincoln Mine Project. The Lincoln Mine is now classified
as "NonGassy with Special Conditions" by the Mining and Tunneling Unit, the
Special Conditions requiring planned operation of positive mechanical
ventilation and associated monitoring.
On July 12, 2011, the Environmental Health Department of the Amador County Land
Use Agency approved a revised Onsite Sewage Disposal Permit for the Lincoln Mine
Project. The permit allows for construction and operation of an engineered
on-site system to dispose of domestic-quality waste-water that will be generated
by the project as presently conceived.
As previously stated, the Company obtained a demolition permit from the Amador
County Building Department on August 16, 2011. The permit allows for demolition
of certain temporary structures that will be removed prior to construction of
new surface facilities. Sutter is poised to work with Amador County Public Works
Department and the Building Department to obtain the required grading and
encroachment permits and building permits as soon as construction-level plans
and specifications are finalized. Typically, grading permits are available
within 10 days of submittal of an application. Building permits may require a
similar time for approval, excepting complex structures that may require more
time.
Warrants
Sutter has 12,794,994 warrants with an expiration date of August 22, 2011. Based
on warrants already exercised the Company expects greater than 96% of the total
warrants will be exercised on or before the expiration date resulting in
proceeds of approximately C$1.8 million that will be used for ongoing
development of the Lincoln Project and corporate expenses.
About Sutter
Sutter is a growth-oriented exploration and development company preparing to
become a North American gold producer. The Company has two projects: the Lincoln
Project located in Amador County, California and the Santa Theresa Project
located in the Northern Baja region of Mexico. Currently, the Company's primary
focus is the evaluation and development of the Lincoln Project, beginning with
the shallow portion of the Lincoln-Comet ore zone of the Lincoln Project,
located on the California Mother Lode Gold Belt. The Lincoln-Comet and Keystone
zones have a NI 43-101 compliant Indicated Resource estimate (completed in
February 2008) of 612,400 tonnes (673,600 tons) grading 11.3 g/t Au (0.33
oz/ton) containing 223,000 ounces of gold and Inferred Resources of 2,161,700
tonnes (2,377,900 tons) grading 6.6 g/t Au (0.19 oz/ton) containing 458,900
ounces of gold.
Sutter currently controls approximately 3.6 miles of the Mother Lode of Amador
County, with 90% of the property still unexplored. Potential exists both at
depth and along strike of the known mineralized zones on both the footwall and
hanging wall. The 120-mile long Mother Lode Gold Belt produced over 13 million
ounces of gold historically with 7.9 million ounces originating from the 10-mile
long segment between Jackson and Plymouth where the Lincoln Project is
strategically located. Properties under the Company's control include seven
historic mines with significant historic gold production totaling over 3.5
million ounces or 27% of the historic gold production from the Mother Lode.
Historic mines located north and south of the Lincoln Project in the Jackson to
Plymouth segment of the Mother Lode success fully mined gold to depths of 4,500
and 6,300 feet, respectively.
In Mexico, Sutter holds the rights to the geologically similar, high-grade El
Alamo district of northern Baja, where historic mining to the water table
produced mined grades of 30 to 60 g/t gold. Initial exploration with its
joint-venture partner, Premier Gold, has demonstrated the extension of
high-grade veins.
ON BEHALF OF THE BOARD OF DIRECTORS:
James Crombie, President, CEO & Director
Sutter Gold Mining Inc.
Forward-Looking Statements
This news release contains "forward-looking information" under Canadian
securities law. Any information that express or involve discussions with respect
to predictions, expectations, beliefs, plans, projections, objectives,
assumptions or future events or performance (often, but not always, using words
such as "expect", "anticipate", "believe", "plans", "estimate", "scheduling",
"projected" or variations thereof or stating that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur or be
achieved, or the negative of any of these terms and similar expressions) are not
statements of historical fact and may be forward-looking information.
Forward-looking information relates to, among other things: the price of silver
and gold; the accuracy of mineral resource and mineral reserve estimates; the
ability of the Company to finance its operations and capital expenditures;
future financial and operating performance including estimates of the Company's
revenues and capital expenditures and estimated production.
Forward-looking information is subject to a variety of known and unknown risks,
uncertainties and other factors that could cause actual events or results to
differ from those reflected in the forward-looking information, including,
without limitation, risks relating to: fluctuating commodity prices; calculation
of resources, reserves and mineralization and precious and base metal recovery;
interpretations and assumptions of mineral resource and mineral reserve
estimates; exploration and development programs; feasibility and engineering
reports; permits and licenses; title to properties; recent market events and
conditions; economic factors affecting the Company; timing, estimated amount,
capital and operating expenditures and economic returns of future production;
operations and political conditions; environmental risks; and risks and hazards
of mining operations. This list is not exhaustive of the factors that may affect
any of the Company's forward-looking information. Forward-looking information
about the future is inherently uncertain, and actual achievements of the Company
or other future events or conditions may differ materially from those reflected
in the forward-looking information due to a variety of risks, uncertainties and
other factors. Although the Company has attempted to identify important factors
that could cause actual results to differ materially, there may be other factors
that cause results not to be as anticipated, estimated, described or intended.
Accordingly, readers should not place undue reliance on forward-looking
statements or information. The Company's forward-looking information is based on
the assumptions, beliefs, expectations and opinions of management as of the date
of this press release, and other than as required by applicable securities laws,
the Company does not assume any obligation to update forward-looking statements
and information if circumstances or management's assumptions, beliefs,
expectations or opinions should change, or changes in any other events affecting
such statements or information. For the reasons set forth above, investors
should not place undue reliance on forward-looking information.
Sutter Gold Mining (TSXV:SGM)
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