Diamond Jim

Location and access:

The Diamond Jim property is located in Elko County, NV 70 miles north of the city of Elko and 20 miles south of the Idaho border. The property averages about 7700 feet in elevation.

Dirt roads lead directly to the mine site and various points of the property. The distance to maintained gravel roads is approximately two miles.

The area lies in the Midas Trough which hosts several large deposits and is one of Nevada’s most important epithermal ore trends.

History:

Discovery of minerals in the Island Mountain District occurred at the Diamond Jim in silver bearing quartz veins though production for the remainder of the century was minor. Limited production occurred in the 1930s where an estimated 3000 tons was mined primarily for silver and lead but serious mining did not take places until 1954. From the 1950s to the 1970s total production at the Diamond Jim was 23,108 ounces (719 kg) silver, 335,870 pounds (152,350 kg) lead, 24,311 pounds (11,027 kg) zinc, 2,200 pounds (998 kg)copper and 28 ounces (871 g) gold.

From 1979 to 1981 Gold Creek Silver Mining Co. shipped 353 tons of ore averaging 39.08 oz/ton silver, 0.05 oz/ton gold, 28.82% lead, and 0.93% zinc.

Modern exploration was conducted in the 1980s and 2000s most significantly by Columbus Mines Inc. who surveyed and sampled the underground workings of the Diamond Jim in the mid 1980s.

Later Mason Exploration Associates Ltd. with Golden Hope Mines Ltd collected rock samples at the Diamond Jim drilled at the St. Elmo.

In 2003 Argosy Minerals Inc. collected rock samples and planned to conduct drilling but the drilling was canceled before implementation.

Geology and Resources:

The Island Mountain Mining District is comprised of two major tectonically-bounded stratigraphic sequences. The lower sequence is an autochthon comprised of three different steeply-dipping units. This is overlain by an allochthon consisting of a “chaotic assemblage of imbricate thrust plates” (Columbus Mines Inc. internal report, 1985).

The main Diamond Jim vein structure and other parallel structures trend northeast, dip steeply west, and consist of zones of strong silicification and brecciation. Zones of strong iron-oxide staining occur locally, accompanied by some copper and antimony oxide minerals. The original sulfide minerals – argentiferous galena, sphalerite and tennantite – occur as cavity fillings, minor replacement pockets, veins, stringers and lenses in a 9-foot (2.7 m) wide quartz vein along a fault.

Mineralization is controlled by stacked shallow-dipping structures associated with imbricate thrust faults. Deposits of this type have been described from other high-sulfidation epithermal districts, but they have rarely been the focus of exploration in these districts. An important economic example of this deposit type is the still-producing Mesquite district in southern California which exploits gold mineralization in both high-angle and flat structures. The Mesquite district has to date yielded more than 3.5 million ounces gold.

Argosy Minerals Inc. optioned the Diamond Jim to test whether there existed an extension of the gold rich St. Elmo vein system 2km to the southeast. An induced polarization survey completed by Golden Hope Mines in 1998 identified a 1600 foot S-SE trending resistivity high on Rosebud Peak which may be coincident with a fault zone that controls mineralization on the St. Elmo. Surface chip sampling above the resistivity returned samples of 6.25, 7.85, 9.3, 9.8, 11.97, 12.03, 15.15 and 15.43 g/t gold within quartz veins and breccia in quartzite.

Columbus Mines Inc. which concentrated their exploration at the main Diamond Jim workings concluded there existed a resource of 4.25 millions of 2 oz/ton silver and .008 oz/ton gold with unstated amounts of copper and lead. They also concluded underground mining operations would grade much higher and average at least 14 oz/silver and 10% lead.

With encouraging surface samples and large gold deposits at the nearby Rosebud and St. Elmo the possibilities of identifying a significant gold resource at the Diamond Jim are favorable as well.