VOLCANO MINE, HIDALGO COUNTY NEW MEXICO
Table of Contents
1. Summary
2. Geological Information and
Location Summary
3. Open Pit Mining Plan: Volcano Mine, Hidalgo
County New Mexico, USA
4. Exhibits
Links:
A mining permit (#H1008ME) has been issued to J.L. Dane, President, Dane Mining & Exploration, LTD by the state of New Mexico, USA and a mining plan is registered with the BLM.
The company will mine the exposed silica deposit and silver vein to a depth of 300 feet, width of 150 feet, and length of 300 feet in PHASE I of the mining plan, producing an estimated 4000 tons per month of shippable ore or a minimum of 953,333 tons. The local copper smelters use the silica as a flux in the production of copper, extract the silver and gold values and remit 85% to Dane Mining & Exploration.
Mining costs for Dane are estimated to be $15.00 per ton. Transportation costs to the smelter, $10.00 per ton. This will make the cost of mining and shipping $25.00 per ton. Previous shipments averaged 20.70 oz/ton silver and .172 oz/ton gold. By careful control and selective mining, the smelter pay price should always be higher than previous shipments. See Volcano Mine Cash Flow Projections. (Exhibit 15)
PHASE II will expand the mining of the silica and adjacent silver vein by extending the depth another 200 feet length of 700 feet and width of 130 feet, producing an estimated 1,483,000 tons. (Exhibit 9) Workings in the underground Volcano Mine, which extend to a depth of 500 feet, show no signs of flooding.
PHASE III will expand the mining operation south through BLM claims Dane I and Dane II, (Exhibit 9) following the silica deposit and vein material.
Action Mining Services, Inc., Sandy Oregon, have developed a roasting and recovery system bringing recoverable gold values to about 1.1 oz/ton of mine rune ore. (Exhibit 11)
Mr. George Brown of George Brown Consulting, Inc. Johnson City, Tennessee was consulted concerning the possibilities of marketing silica as a by-product. His work established that by using a "washing process" the silica will be improved and gold and silver recovery will be increased 30% to 100% by removing the sulfasalts. (Exhibit 10-12)
Their work has indicated that with a processing mill, we can increase the profitability of the ore. A mill with adequate water and power has been located.
The suggested "Greenfield" evaluation of the Volcano Mine by Mr. George Brown gives it a life of 15 years for PHASE I and a value of $7,000,000. (Exhibit 10)
Mr. Don Kerr, a certified general Real Estate Appraiser of New Mexico, Arizona and Texas, approved and accepted by New Mexico Energy, Minerals and Natural Resources, appraised the Volcano Mine to have a value of $18,680,000 as of May 16, 1998.
In November, 1998, a contract was entered into with RecWest, a company from Tucson, Az. To mine and ship ore from the Volcano Mine to Phelps Dodge, Chino Smelter. RecWest shipped 475 tons of low grade ore to the Chino Smelter after turning the project over to an inexperienced mining engineer for 4 months. Their contract was canceled.
In March 1999, W.L. Maintenance and Dane Mining commenced mining and processed approximately 4,380 tons of high grade silica, with good silver and gold values for smelter use. Also produced are approximately 16,000 tons of "Decorative Rock" in various sizes ready for shipment.
On August 30, 1999, W.L. Maintenance canceled all contracts, assigned all ownership of mined and processed rock to the company and left.
At this time Dane Mining is:
1. Discussing with several Copper Smelting Corporations, the possibility of long term silica, silver and gold supply contracts in Arizona, New Mexico and Texas.
2. Aggressively researching the Decorative Rock business. Approximately 90% of the remaining overburden necessary to be moved is Decorative Rock. Commercial Decorative Rock companies have been contacted in Tucson, Las Cruces, Silver City and other areas. Negotiations are on-going at this time.
At this time, Dane Mining & Exploration, LTD is negotiating with companies that will mine the Volcano Mine, taking advantage of its high silica, silver and gold values, and the market for decorative rock.