Tombstone Project

History

The Tombstone mining district is one of the historical high-grade silver districts of Arizona, with well over 100 past-producing underground mines documented. On the basis of its historical production, the district continues to be ranked as the largest primary producer of silver in the state. The strongest zone of mineralization in the district is the Contention-Grand Central area, on Baroyeca’s Tombstone property, and the majority of past-production in the district has been from this area.

Historical Mining

Early mining activity in the district peaked during the period 1879 to 1886, with subsequent periods of heightened activity from 1903 – 1909 and 1917 – 1922. Mining continued, intermittently and on a small scale, for the next 2 decades. After a period of dormancy, a heap leach operation was started in 1971, to process waste materials left by the historic mining operations. In the early 1980’s, Tombstone Exploration Inc. re-opened the historic Contention-Grand Central mine as an open pit operation with ore processed on-site in a heap leach cyanide operation. PBR Minerals Inc. did additional mining at the Contention pit in the late 1980’s, but by 1989 all mining on the property had ceased.

Mineralization

Mineralization on the Tombstone property consists of structurally controlled and replacement-style mineralization which occurs preferentially along certain (permeable) structures and certain favourable (chemically reactive and/or with physical properties that create favourable conditions) horizons. Mineralization is focussed at the junctions of structural conduits and favourable stratigraphic horizons. Much of ore formed in structural traps along roll crests (in their present position). Historical mining was focussed on narrow, high grade, highly oxidized mineralized fractures or replacement zones with significant open spaces. The main value in the ore came from silver, with lesser values from gold, lead, zinc and manganese. More recent open-pit mining was designed to recover lower grade, disseminated type mineralization present along the Contention dyke trend.

Nearby Gold Production

The Toughnut and Good Enough claims, located less than 500 metres northwest of the north end of the Contention pit and immediately south of the city of Tombstone, are the second largest past-producing mines in the Tombstone district, after those on Baroyeca’s Phase 1 property. Total production from the Toughnut- Good Enough mines is about 290,000 tons at an average grade of 34.5 oz/t Ag and 0.05 oz/t Au. Mineralization is typical of the district, consisting of highly oxidized vein and replacement-style mineralization which is controlled by favourable structures and stratigraphy. The Empire and Goodenough anticlines and the Boss and Sulphuret dykes are important controls to mineralization in this area.

Recommended Work Program

A two-phase $2.1 million work program is recommended for the Tombstone property. The recommended Phase 1 program will provide specific information needed for planning the Phase 2 exploration program. It also involves the necessary permitting to allow the company to continue operation of the aggregate quarry operation. Phase 1 has a budget of $600,000. The Phase 2 program involves detailed drilling in the Contention pit area and preparation of a preliminary resource estimate. Phase 2 has a budget of $1.5 million and is contingent on the results of the Phase 1 program.

Phase 1 Work Program

Phase 1 will include detailed geological mapping of property and in particular of the Contention pit. Representative rock chip sampling in the pit will improve the understanding of grade distribution and control. A program of twinned rc and core drill holes is recommended, to compare the merits of each method of drilling and to test for mineralization along the Contention dyke trend, at depth below the existing pit. A total of 1000 metres each of rc and HQ core drilling will provide sufficient information to compare the two drill methods.

Drilling

Drill holes should include vertical and angle holes, drilled in fences of 3 holes each (1 vertical, 1 angled to the east and 1 angled to the west) at intervals through the Contention pit. One fence of holes should be drilled at the north end of the pit, one fence in the centre and one fence of holes at the south end of the pit. Vertical holes should be a minimum of 170 metres in length, to ensure that the drilling extends below the water table and tests the suitability of each method above and below the water table.

Drill Sampling

All holes (core and rc) should be sampled from top to bottom, in 3 metre intervals. The program should include suitable blank and standard quality control/quality assurance samples, inserted at regular intervals in the sample sequence. All samples (core, rc and rock chip) should be analysed for gold and silver by fire assay/gravimetric finish on a 50 gram sample, and all should be analysed for a multi-element suite by ICP/AES methods.

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