Western Sierra Resource Corporation, a Utah Corporation (“WSRC”), has a 114-year mining history in Arizona, Nevada, California, and Mexico. WSRC finalized a contract to acquire a 70% interest in Silver State Mining Group, Inc. a Nevada Corporation (“SSMG”) on June 30, 2021. This transaction provides WSRC with a majority stake in the development of the 640+acre Sage Hen Gold Reserve in Western Nevada.
SSMG contracted with Sage Hen Property owners Andy Kay and Lonnie Treadwell (“Kay and Treadwell”) to transfer title to land, BLM leases, and mineral assets pertaining to the Sage Hen Property to SSMG in exchange for a profit distribution. Under the agreement, SSMG’s principals will utilize their decades of precious metals mining experience, including their experience with the subject property (as well as other successful projects in the immediate vicinity), to manage and develop this assemblage of claims encompassing 640+ surface acres, and to subsequently process the mined material utilizing enhanced recovery technologies.
With written approval by Kay and Treadwell, WSRC has acquired 70% of SSMG’s stock in exchange for WSRC’s $10 million investment in the project. This capital will be used to immediately initiate development of these reserves, and to establish a 100 ton per day facility to process material and recover gold and other precious metals historically demonstrated by extensive testing within these mining claims. This 100-ton per day facility represents Phase I of the project and is slated to be in full operation within 12 months. Initial mobilization and limited production will commence immediately. The WSRC-SSMG transaction was executed on June 30, 2021 and finalized with an initial transfer of funds from WSRC to SSMG on July 2, 2021.
Due to the extensive prior geological work in the area (and specifically on the subject claims), SSMG and WSRC have determined it to be redundant to expend the time and capital required to secure an NI 43-101professional report, but rather to utilize that investment of time and capital more efficiently in proving up the claim’s resources though production. Concurrent with realizing actual production results, an NI 43-101 professional report may be commissioned to further refine exploration methodologies and aid in establishing additional specific areas of focus within the boundaries of the reserve.
Location and Geology. The Sage Hen claims are located within the Oreana Trend, a consistent ancient seabed that extends to depths of over 1000 feet giving rise to an active mining area known to contain significant precious metals and offer a unique low risk development opportunity. Many mining groups, including Newmont, Rye Patch, Pershing, Victoria, and others have cored, mined, and expended significant resources and achieved impressive results in the area. Historical owners of the Sage Hen mining claims have maintained active mining claims for over 20 years based upon hundreds of assays over 20,000 acres of the trend.
Assays. As field work is completed and specific production sites are established within the claim boundaries over the next 90 days, associated Laboratory Test results and detailed Assay Reports will be provided on the WSRC web site. The Company is confident these detailed reports will reflect the benefits of enhanced recovery technologies being employed in the development of the 100 ton per day Pilot Plant.
Mine Plan & Operation. In concert with the immediate field surveys and permissible claim development, SSMG will commence the required 90 day permitting process to obtain a five-acre disturbance permit on the 640 acre development site to build a 100 ton/day Pilot Plant. This facility will be expanded by an additional 1,000 tons per day for a total of 1,100 tons/day at the conclusion of an additional six- month permitting process and concurrent with other ongoing development approvals. The target source material is directly mined from surface, and based on geology and previous testing, is likely consistent to a depth of at least 1000 feet. The operation is not hard rock, shaft- driven mining but is, rather, minimally invasive. The operation will require limited heavy equipment, minimal excavation and no caustic extraction byproducts. Raw ore will be crushed and rolled to a very fine material processed using proprietary chemical and mechanical technologies. SSMG will utilize experienced mining operators, contractors, technology patent/trade secret owners/experts, and equipment specialists.
Technology. The recovery technology is existing, proven, off-the-shelf technology used extensively in other industries. The adaptations are in the proprietary chemical and mechanical technologies and the environmentally friendly leach of the tailings following the process. SSMG will provide more detailed information as to completed assays and technologies as the project advances.
Economics. Projected net income based on prior assays are as follows:
|Projected Net Income||Initial||Increased to|
|100 tons / day||1,100 tons / day|
Capital Requirements. A total of $10 million will be required to construct the 100 ton/day plant and commence production and recovery operations. $1.5 million is required within 60 days, $2 million within 90 days, and the balance of $7 million within 150 days.
An additional $50 million will be required to construct the 1,000 ton/day plant. It is anticipated that these costs will be paid from accumulated net income and/or borrowing against its net income allocation.