Eddy Gulch Gold Mines: Klamath, Mt. Laurel, Union, Anna Johnson

Geology - Past Production

Liberty Mining's Eddy Gulch properties cover a 2 mile long vein system hosted in the low-angle Soap Creek Ridge thrust fault, where it slices through the Salmon Mountains of Northern California. They veins yielded a reported 320,000 ounces to downstream placer and near surface lode mining operations in the 1800s. Ore bodies are commonly localized along contacts between hard chert blocks spalled off of the hanging wall of the thrust and softer sheared greenstones and metasediments. Other ore bodies occur in fractures conjugate to the thrust (Mt. Laurel). Diorite porphyry sills are often associated with ore bearing vein segments. Productive ore bodies have been mined along the surface apex at an average spacing of 750 feet. Productive vein widths have ranged from 4 feet to 22 feet, with an average lode production grade of 0.565 opt, including grades of up to 2 opt, 22 feet wide (Klamath Mine). The majority of past mining operations employed gravity separation methods (stamp mills), reporting 85 to 90% recoveries. Higher recoveries were achieved in later years with flotation. Recent metallurgical testing by Liberty has confirmed reported recovery data.

The nearly one-ounce, crystalline gold specimen shown in the photo to the left (held by an unaffiliated collector) came from the Anna Johnson Mine.

Development - Mining Potential

The ore bearing structure dips about 10 degrees to the southeast. The ore deposit is mesothermal. These factors eliminate the problem of limited ore depths associated with epithermal and steeply dipping ore deposits. The old timers only mined down dip on ore bodies that broke surface. No attempt was made to systematically explore the huge vein area further into the mountain. An existing cross-cut tunnel approaching the veins from below allows for excellent underground based drilling access for one of the primary target areas. Widely spaced surface based drilling in 1975 and 1986 intercepted gold values across a broad area of the vein accessed by the cross-cut. The portal of the crosscut is located on a patented claim, reducing permitting issues. We estimate a profit of $21 million from initial sampled and drilled surface and underground targets. $100 million dollars profit or greater from underground production is well within reasonable estimation.

Liberty is currently drawing up plans for a 3-ton per hour mill. We plan to rehabilitate the existing cross cut (mostly in good shape), complete additional underground and surface based drilling, leading to more detailed delineation of known and additional ore bodies, and begin pilot production.

Permitting

After some mishandling of the issue and related delays by the USFS, the US Fish and Wildlife Service determined that our operation would not impact spotted owls. A new crosscut to the vein was approved in 2002, and another similar mine in the vicinity was recently approved and is now operating. Therefore, we do not anticipate any major problems with permitting our operation. On August 15 '08 we submitted a new plan of operations to the USFS and Siskiyou County. Liberty has also secured a large patented property just down stream from the mines for tailings disposal.

Chuck's Nuggets

Carlin, Cortez, Battle Mountain - all are in the upper horizon of underthrust blocks, where hydrothermal activity was concentrated by an overthrust block seal. Eddy Gulch and other districts along the Soap Creek Ridge Thrust comprise what we believe will be the next major similarly thrust hosted discovery.