Producing Gold in Alder Gulch

Apex Mine

The Apex Gold joint venture, formed in 1999, operated and developed the Apex portion of the historic Apex-Kearsarge lode. The Apex mine is fully permitted and over 2600 feet of exploration and development drifting and raising was completed along the Big vein. Several ore chutes were developed in high grade ore. An estimated 19,600 tons of ore grading 0.32 ounces per ton are indicated in the underground workings. Channel sampling shows up to 4 foot of 3.36 ounces per ton. Mineralization is open along strike in both directions and down dip. An additional 12,000 tons of ore were mined in 1999 from an open cut on the Big vein.

Ore was shipped to the M&W mill near Virginia City and stockpiled. The mill was operated during 1999 & 2000 and produced approximately 1800 ounces of gold from development ore. This fully permitted custom mill was recently upgraded to improve recovery and to increase the capacity of the mill. The ore is treated by gravity, flotation, and cyanide of the concentrates. Excellent recoveries have been obtained from the sulfide flotation. As of 2003 there is still approximate 500 ounces of gold in stock pile ore at the mill site.

At its height of gold production, Alder Gulch was known as one of the richest placer gulches in the world. Discovered in 1863, it became the largest historic gold producer in Montana. Up to 10 million ounces may have been washed from the gravel. As the miners worked their way upstream, the gold became coarser and nuggets more common. Searching for the source of the gold, prospectors located rich lode deposits near Summit City at the head of the gulch. The celebrated Oro Cache, Kearsarge, and Keystone mines were famous for the richness of their gold. The Atlas and Bartlett mines, discovered in later years, added to the riches of the district.

Today many of these mines are located on land owned by Roy and Marlene Moen through Moen Builders and M & W Milling. Their 33 patented claims and 168 unpatented claims cover key mineralized ground in this famous old district. The claims include the southern extension of the famous Kearsarge Lode covered by the Apex Claim. The Moens' claims are owned outright. The claims are surrounded primarily by BLM land and stretch along Eight miles of Alder Gulch above Virginia City, Montana.

Exploration The property is underlain by some of the oldest rocks in Montana, Archean-aged gneiss interbedded with iron formation, dolomitic marble, graphitic schist, and amphibolite are the dominant rock types. These were intruded by pegmatite and ultramafic dikes. Gold occurs along northeast trending shear zones cutting the gneiss. The gold is found in pyrite-bearing quartz veins and breccias associated with sericite-ankerite-graphite alteration and Kspar alteration. Assays from internationally respected labs show strong gold mineralization over the area covered by the Moen claims.

Extensive exploration has been conducted on the property over the past ten years. Hanover Gold leased the property in a bid to consolidate the land in the district. They did widespread geologic mapping, flew an airborne geophysical survey, assayed hundreds of samples from outcrops, soils, and mine dumps, trenched selected targets, and did limited drilling on their preferred targets.

Kennecott joint ventured the property with Hanover Gold from 1992-95. They drilled widely spaced exploration holes designed to test for large-tonnage, bulk-minable gold deposits. Core drilling in 1992 identified the Big vein gold zone on the Apex claim. The following year, they intercepted mineralization along the Atlas zone and on adjacent properties. Kennecott estimated that their drilling in Alder Gulch indicated a

1.6 million ounce gold resource,

which was too small for them. In 1995, Kennecott dropped out when they were unable to consolidate other major land positions in the district.

Hanover Gold continued to define the Apex-Kearsarge mineralization with additional drilling. They mined a small open pit on the Big Vein and re-opened the old mine tunnels. New development drifts were driven, trying to mine high grade ore underground. Lack of funds forced them to close the mine in 1996 before they achieved any significant gold production. Hanover defined mineralization along 1,000 feet of strike and 450 feet down dip on the Apex-Kearsarge. Metallurgical tests indicated a 95% recovery from gravity, flotation, and cyanide leach. By 1997, Hanover felt the best mining method would be open pit. They were forced to drop the property in 1998 by the collapse of the gold price and Montana's prohibition against using cyanide for open pit gold mining.

Atlas Mine

The Atlas group of mines are located near the famous Oro Cache mine in Spring Gulch. The lode was first discovered in 1865 and called the US General Grant lode. In their first pit, five feet deep, prospectors found a "crevice five feet wide full of quartz studded all over with gold, in size, from dust to nuggets." In 1910, it was rediscovered and named the Atlas. The gold bearing quartz-Kspar zone is reported to be from 3 to 5 feet wide and can be followed for up to 2000 feet along strike. It has never been tested at depth. In 1938 Anaconda geologists estimated it to contain 279,000 tons of 0.2 opt Au and 0.3 opt Ag, or approximately 52,000 ounces of gold.

Kennecott drilled three widely spaced holes that intercepted the Atlas with:

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KS 13 5 ft of 0.27 opt Au and 5 ft of 0.18 opt Au,

KSR 15 10 ft of 0.12 opt Au,

KSR 16 5 ft of 0.19 opt Au and 5 ft of 0.18 opt Au

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A program of trenching and drilling is planned to evaluate the mineralization in more detail.

Bartlett Mine

The historic Bartlett mine was developed on a 15 to 20 foot wide vein that formed between dolomite and soft gneiss. Production from four levels averaged 0.4 opt Au and 1.4 opt Ag over six years from 1935-41. The "south extension" on the bottom level of the mine in 1939 showed ore 19 feet wide running 0.7 opt gold. The ore was reported to be gray and white quartz with little sulfide, no silver, and plenty of free gold. The mine was shut down by government order in World War II, not because it ran out of ore.

No modern exploration has been done on this prospect. The mineralized portion of the vein is on a very steep slope beside a massive silicified dolomite outcrop. Its inaccessibility has discouraged trenching or drilling the prospect in recent years. The relatively narrow, high grade nature of the Bartlett ore body was of no interest to Kennecott but is of interest to Moen Builders.

Oro Cache Mine

The Oro Cache mine has seen no modern exploration. It was one of the richest mines in Alder Gulch. It was mined from 1864 to 1872, again from 1889 to 1892, and only sporadically thereafter. Gold occurs in quartz-ankerite-pyrite breccias and stockwork vein zones hosted by quartz-feldspar gneiss with Kspar alteration. Assays up to 0.7 opt Au have been obtained from surface samples. One drill hole from 1989 tried to test the mineralized zone but assays from that hole are no longer available. It may have intercepted old stopes. There may still be significant potential for an underground operation at this mine.

General Shafter Mine

The Keystone lode was discovered in 1864 and worked until 1872. Its richness was well known in those early days. By 1888, there were 350 feet of tunnels and 285 feet of shafts in the mine with a large amount of stoping done. By 1900, it was renamed the General Shafter and was put back into production. An early cyanide mill, built in 1901, operated successfully until damaged by fire in 1905.

Kennecott drilled three widely spaced holes along the General Shafter in 1993. Two of the holes appear to have missed the target zone and old workings were encountered in the other. No evidence of a large-tonnage target was found but the potential for smaller, high grade mineralization has not been tested.

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