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Regional Exploration
Allied Nevada has royalty and other interests in approximately
100 mining properties in Nevada. Some of these properties have been
optioned and leased to other exploration companies in return for
production royalties averaging about 2.6%. There are advance minimum
royalties and, on some of the properties, work commitments. Twenty of
the properties have been explored to the extent that technical studies
could be prepared. The royalties and other property receipts are
expected to provide an income stream to Allied Nevada of approximately
$3.0 million per year. The four properties that Allied Nevada believes
currently show the most potential are:
Battle Mountain Property
The Battle Mountain property is located in the Battle Mountain, Nevada
mining district adjacent to and on-trend with Newmont’s
Phoenix-Fortitude property. Battle Mountain is subject to pre-existing
agreements with Madison Minerals Inc. (formerly Madison Enterprises
Corp.) and Great American Minerals Exploration (Nevada) LLC. Madison
Minerals Inc. is the operator.
Pony
Creek/Elliot Dome
The Pony Creek property is located in the Larrabee mining district of
Elko County, Nevada in the southern half of the Carlin Trend, 28 miles
southeast of Carlin and 19 miles south of Newmont Gold Company’s Rain
Mine. The Pony Creek/Elliot Dome claim group consists of 903 unpatented
lode mining claims located across the crest of the southern part of the
Pinyon Range.
All significant gold mineralization outlined to date on the property
appears to be directly related to felsite breccias formed within a
rhyolite intrusive, and over 90% of the mineralization discovered to
date on the property lies within 500 feet of the surface.
There is considerable potential for the definition of additional
resources at depth.
The claims on Pony Creek/Elliot Dome are held by Mill City Gold Corp.
which owns a 100% interest in the property and pays Allied Nevada an NSR
of 3%. Escalating annual property payments must be paid by Mill City,
which may also purchase 1.0% of the 3.0% NSR for a total of $1 million.
Grandview Gold has an option to earn a 60% interest on the Pony
Creek/Elliot Dome property by an expenditure of $3.5 million by July 31,
2007. In 2007, Grandview Gold plans to further define the gold resource
in the rhyolite intrusive and drill-test the Red Rock sediment-hosted
Rain-type target southeast of the resource area in the intrusive.
Rock
Creek and the South Silver Cloud Target Area
The Rock Creek Gold-Silver property and its northern extension, South
Silver Cloud, were acquired by Duncan Park Holdings Corp. They are 30
miles east-northeast of Battle Mountain, Nevada along the Northern
Nevada Rift.
Rock Creek has had several near-surface drilling programs in the past.
A total of 122 holes h drilled along the 11-mile length of the Rock
Creek/South Silver Cloud Property. However, no holes have been drilled
on the main Rock Creek structures to depths of more than 500 feet.
Eden
The Eden property is located 14 miles south of Winnemucca,
Nevada adjacent to US Interstate Highway 80 in Humboldt County. The
property is located on the northwestern side of the East Range in the
Western Nevada Rift. The Sleeper deposit and the Florida Canyon mine
are within this trend. The Eden property consists of a total of 68
unpatented lode mining claims and 648 acres of fee property.
Cobb
Creek
Staccato Gold Resources acquired its interest in the Cobb Creek gold
property in November, 2004. The property is located in Independence
Trend, Nevada north of Elko. Staccato holds the property on a 50/50
basis with Bell Coast Capital Corp (now Uranium Power Corp). The Cobb
Creek property consists of 51 claims and now comprises an area of 1,000
acres covering a sediment-hosted deposit and exploration target.
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