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Animas can earn a 51% interest in the Kinsley Mountain property by spending $1.5 million in exploration expenditures over three years (of which $200,000 must be spent by the end of 2010). At that point, a joint venture with Nevada Sunrise Gold Corp. (Nevada Sunrise) will beformed. Upon earning its initial interest Animas may elect to spend a further $3 million in exploration expenditures to earn an additional 14% interest for a total interest of 65%.
The Kinsley Mountain property is located in extreme eastern Nevada in Elko Co. between the towns of Ely and Wendover.
The Kinsley Mountain property consists of 141 unpatented lode mining claims covering an area of approximately 2807 acres (1136 hectares). Gold mineralization occurs within a stratigraphic section of Middle to Upper Cambrian-age sedimentary rock units including limestone, dolomite and shale. This mineralization exhibits characteristics similar to other sedimentary rock-hosted "Carlin-type" gold deposits in Nevada. Gold enrichments occur in both bedding-parallel and structurally-controlled zones of disseminated mineralization within altered sedimentary rocks. Mining by Alta Gold was restricted to a cluster of deposits aligned along a northwest-oriented fault zone. Exploration drilling has identified several other mineralized centers, which are yet to be developed.
Gold mineralization at Kinsley Mountain consists both of shallow low-grade oxide ore, which was mined and produced by Alta, and deeper higher-grade refractory mineralization. This deeper material was tested by only a few deep drill holes. Holes that did test this zone yielded grades that ranged from 0.235 ounce per ton gold on the east side of the range to 0.149 ounce per ton gold one mile to the northwestBy analogy to the better-explored gold deposits of the Carlin trend, the deeper zones of gold mineralization at Kinsley Mountain could contain many times the amount of oxide gold already mined. The district remains remarkably under-explored.
(Note: Historic assays are presented only to give an indication of the type of mineralization present, and cannot be independently verified) Nevada Sunrise has assembled a substantial technical archive for the Kinsley Mountain property, including records for 1,156 drill holes, with a total length of 244,900 feet (an average depth of only 212 feet).
Exploration interest in eastern Nevada is currently elevated due to recent significant gold discoveries in the Pequop Mountains northwest of Kinsley Mountain, in similar Early Paleozoic-age carbonate stratigraphy.
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