KATE HARDY MINE.
The Kate Hardy Mine was discovered in 1860 and is an underground lode
gold mine located in Sierra County, California, and is approximately three
miles south of the Brush Creek Mine. The Kate Hardy Mine consists of two
patented claims comprising approximately 42 acres and 15 unpatented claims
comprising approximately 320 acres. The Company's investment in this property
is $156,456 at June 30, 1997, consisting of $58,667 of land and land options,
and $97,789 of development costs.
All of the unpatented claims in the property package are in good standing
with assessment work documents for 1997 filed with both the BLM in Sacramento
and Sierra County in Downieville. The Kate Hardy Mine has no permits for
mining operations.
In 1957, Richmond Flatland, Sr. acquired the Kate Hardy Mine. In the mid
to late 1970's, various attempts were made to rehabilitate the Kate Hardy
Mine. On June 30, 1992, the Company entered into a lease effective March 23,
1992, in the form of a mining option agreement for a term of five years
expiring March 22, 1997. The Company paid a $50,000 payment (initial option
payment) upon the execution of the agreement; and during the term of the
lease, must pay $5,500 per month for each month during the first year; $6,500
per month during the second year; $7,500 per month during the third year;
$8,500 per month during the fourth year; and $9,500 per month during the fifth
year. In addition, the Company must pay a 6% net smelter royalty on all
minerals produced. The option purchase price for the mine is $1,500,000 less
75% of all option payments paid up to a maximum of $750,000.
The Kate Hardy Mine contains a quartz vein on a reverse fault. The vein
is traceable along the surface for approximately 1,500 feet and disappears
under tertiary lava both to the north and the south. The vein varies in width
from a few inches to over 55 feet. Dykes of gabbro and serpentine cut the vein
irregularly. Considerable slate has been replaced by carbonate close to, and
within, the vein. Mariposite is erratic in distribution and is not necessarily
confined to the exposed serpentine zones. Historically, the best gold
production has come from the foot wall and hanging wall portions of the vein.
The vein core is largely barren bull quartz. Sulphide minerals associated with
gold in the vein include arsenopyrite, pyrite, galena and trace sphalerite.
Development has been carried out over 2,700 feet of strike length on the
Principal No. 1 North and South Drifts. The vein has been developed on five
levels, two of which are accessed by an internal shaft. Stopping has been
carried out with three principal blocks over a vertical range of 600 feet.
The Kate Hardy mine has been in a care and maintenance level since 1975.
The site has a 100 tons-per-day gravity flow mill which requires some
upgrading and repair. The underground workings in the south adit are in fair
condition with appropriate 20-pound mine rail and all electrical and
ventilation utilities installed. The north adit is caved-in for approximately
75 feet and will have to be rehabilitated with new timbering before access to
the north section of the property is permitted. There is a corrugated mill
building in fair condition and an equipment building in fair condition on the
property.
The Company has been permitted to dewater the mine. This will allow the
Company access to approximately 16,000 tons of ore and will enable the Company
to explore the O'Donnell winze and the five existing ore shafts.
The Kate Hardy Mine is accessible by Mountain House Road, a graveled
road. Power is supplied by Pacific Gas and Electric Company, a public utility.
During 1997, the Company paid $10,000 to the Kate-Hardy Mine lessor to
extend the lease agreement for an additional three month period. The extension
expired on June 27, 1997. No other extensions and/or agreements had been
negotiated to date.
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