COEUR D'ALENE, Idaho, Sept. 9, 2013 (GLOBE NEWSWIRE) -- New Jersey Mining Company ("NJMC" or the "Company") today announced the signing of an option to lease agreement by Juniper Resources ("Juniper") for the Skookum Shoot of the Golden Chest Mine in northern Idaho. The Golden Chest Mine is owned 52.22-percent by Marathon Gold Corporation ("Marathon") and 47.88-percent by NJMC, which is also the project operator.
The agreement gives Juniper the option to undertake definition drilling on the Skookum Shoot. Juniper then has until November 30, 2013 to decide whether to proceed with underground mining of the Skookum Shoot. If Juniper elects to proceed with mining prior to expiration of the option period, the lease term is 39 months from the signing date.
The Skookum Shoot extends for 400 m along strike but represents less than 40-percent of the total favorable strike length of the Idaho Fault which hosts several associated gold bearing veins. Areas of high grade potential that are not included in this agreement are the Joe Dandy veins at the south end of the mine and the Katie Dora veins at the north end of the mine. The proposed mining of the Skookum Shoot will have a minimal impact on the existing open pit resource of 4,371,000 tonnes Measured and Indicated grading 1.59 g/t Au and containing 223,000 ounces of gold, and 2,369,000 tonnes Inferred grading 1.33 g/t Au and containing 101,000 ounces of gold.
Terms of the Agreement are as follows:
1) $US 50,000 was paid on signing and divided on a pro rata basis between Marathon and NJMC.
2) Juniper will conduct a definition drill program of 1,500 to 3,000 meters and decide by November 30, 2013 whether it will exercise its option to enter into the mining lease.
3) If the lease option is exercised, Juniper will pay Marathon and NJMC a $200,000 USD advanced royalty payment to be divided on a pro rata basis on ownership between Marathon and NJMC.
4) Juniper Resources will pay a 2-percent net smelter return (NSR) royalty to Marathon and NJMC on a pro rata basis.
5) Juniper will make the payments to the vendor of the Golden Chest Mine for the duration of the time that Juniper is mining the Skookum Lode. These payments amount to $1.5-million for the next three years.
6) The mine owners are free to explore the rest of the property outside the lease area during the term of the lease.
If Juniper exercises the mining lease, it is anticipated that the ore from the Skookum Shoot will be processed at the Company's New Jersey Mill in Kellogg, Idaho, providing another potential source of project income to NJMC. Discussions with Juniper are expected to commence shortly to negotiate a milling contract.
NJMC CEO Del Steiner stated, "With our priority on cash flow from our mill and small-scale production opportunities, this agreement with Juniper at the Golden Chest demonstrates our plan going forward. We believe that owning and operating a mill within an active mining district has the Company well-positioned to generate near-term returns to shareholders while also enhancing our project evaluation capability."
About New Jersey Mining Company
New Jersey Mining Company (OTCBB:NJMC) recently introduced a new management team which is implementing a new strategic plan, building upon its strong asset base and focused on generating cash flow from its mill and small-scale production opportunities.
NJMC is located in the Silver Valley mining region of North Idaho where it built and owns a fully-permitted 360 tonne per day flotation mill and concentrate leach plant. The mill underwent a $3.2-million expansion in 2011 in exchange for a guaranteed milling agreement. The Company is guaranteed 3,000 tonnes of ore per month plus all unused and excess capacity.
The Company also owns a 47.88-percent interest in the Golden Chest Joint Venture, which controls the Golden Chest Mine, an 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. The Golden Chest Joint Venture recently optioned a portion of the Golden Chest Mine to Juniper Resources, a mine development and production company that will fund a drill program to evaluate the production potential of the Skookum Shoot portion of the mine.
NJMC trades on the OTCBB under the symbol "NJMC."
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. Factors that could cause actual results to differ from those anticipated are discussed in New Jersey Mining Company's periodic filings with the Securities and Exchange Commission.
CONTACT: Del Steiner, CEO Email: email@example.comSource:New Jersey Mining Company