Investment Opportunity

After reviewing this web site most readers will probably conclude that as a small mining company we have probably bitten off more then we can chew and they would be right. Moen Builders, M & W Milling and Refining and Roy and Marlene Moen have endeavored to assemble not only an enviable land position with multiple high quality gold targets but have also built the infrastructure, technology and hardware that goes along with a fully functional milling facility, lab facility and plant construction capability.

With the relatively flat gold prices we’ve seen in recent years our ability to finance our various projects has been limited. It’s only been through our belief that a more bullish gold market would eventually return that we continued to modestly expand and acquire new mineral properties.

This year we have numerous projects we wish to pursue. Many are already permitted and bonded. However, we will require additional financing to pursue many of them. Some are quite modest and short term, others will necessitate much larger capital expenditures and time frames. Some are stand alone projects while others will require sizable land position holdings, construction costs, drilling costs, support personnel, metallurgical test work and perhaps prefeasability and predevelopment work.

In almost all cases we need joint venture partners, leasers, lease optioners and in some cases outright purchasers of our land holdings and/or our milling and refining facilities.

As mentioned elsewhere in the web site these projects are designed to look at smaller high grade underground minable vein deposits, larger bulk tonnage minable underground deposits and open pittable flotation/gravity recovery deposits.

Hundreds of drill holes, to date, have already outlined considerable gold resources in all the above categories within our claim blocks. It’s our belief, given the recent upswing in gold prices, that this district will again become a premier gold producer in Montana.

Introduction

Located in Southwest Montana, the Virginia City Mining District is credited as being one of the richest gold districts in the United States. Historic production may have exceeded ten million ounces. The bulk of the production came from placer deposits along Alder Gulch but rich lodes were also exploited. Today modern exploration methods have identified numerous vein and bulk tonnage targets that were unknown to the old timers. Also reviews of old reports, letters, maps and news paper articles have identified old mines that could be reopened and mined using modern underground mining methods. All this led to renewed interest in the district by major and junior mining companies. Millions of dollars were spent in exploration by such companies as Hanover Gold, Kennecott, BHP, United Reef Petroleum, Billiton and others. With the passage of Initiative 137, a law effectively prohibiting the use of cyanide in open pit mines in Montana, most companies lost interest in the district. This created a vacuum that has been effectively filled by Roy Moen.

History

Since the 1970's Roy and Marlene Moen have slowly gained control of a good portion of the district. Today they control 33 patented and 168 unpatented claims and are working on an option to acquire an additional 77 patented and 75 unpatented claims. It all began with Roy’s interest in placer mining. Over the years Roy has mined numerous placer deposits in Alder Gulch. With the exhaustion of most of these Roy turned to hard rock prospecting, but unlike placer mining he quickly realized that this type of exploration and mining required much larger sums of capital. This capital could only be generated by seeking partners or by leasing. Thus began a series of various joint ventures and lease options.

United Reef Petroleum (URP)

In 1987 Roy and Marlene entered into an agreement with URP to explore their property. During 1987 URP completed an integrated exploration program of grid line cutting, magnetometer, VLF-EM altimeter surveys, soil sampling, rock sampling and trenching. At least six vein zones were discovered and additional work was planned for the 1988 season. Due to the stock market crash of 1988 financial problems plagued URP and only a small portion of their aggressive drilling program was carried out. Their inability to keep up land payments forced the termination of their lease with Roy.

Hanover Gold Company (HGC)

In 1990 HGC optioned the claim group. During the coarse of their lease HGC aggressively carried out numerous geochemical, geological and geophysical surveys, core and reverse circulation drilling, underground exploration drifting, alteration and mineralogic studies, and metallurgical work. They also carried out limited mining on a small open pit. In 1992 they entered into a joint venture agreement with Kennecott (see Kennecott below). This joint venture was terminated in 1995 when Kennecott was unable to acquire additional properties in the district. HGC terminated their lease in 1998 after the passage of Initiative 137, mentioned above. They were unable to raise additional capital because investors felt Montana was a hostile environment for mining.

Kennecott Exploration (KE)

Between 1992 and 1995 KE actively explored for and discovered gold deposits on the claim group. They used many methods but by far the most useful was the diamond drill (see exploration results below). They terminated their joint venture because they could not consolidate the district into one land package.

Photo #1: The Virginia City Mill Site includes an 11,000 square foot mill building, 9700 square feet of mineral processing and a 1300 square foot fully equipped Metallurgical Laboratory. Also located at the site is a complete 3000 square foot Prefab Shop capable of renovation and rebuilding mine and mill equipment, heavy equipment and rolling stock.

There have been other lessors and partners but the above three have been the major players.

Roy was not idle during this time. He felt there was an unfilled niche to be exploited. This niche resided in mining and milling smaller, higher grade deposits that most other mining companies were not interested in. He also saw the need for a milling facility that could process ores from other small operators and act as a general test plant. With this in mind he began the construction, in 1991, of a 150 ton per day, environmentally friendly, gravity-floatation mill near Virginia City. After the completion of the mill in 1993 ores from various mines in the district were processed. Some ores coming from Roy’s mines and other lots coming from other operators.

After the termination of the lease with Hanover Gold Company in 1998 Roy had his entire claim group back. Using the large data base generated by the a fore mentioned companies Roy felt there was an excellent chance to mine underground on the Apex claim. Lacking the necessary capital to do it alone he entered into an option agreement with a company on the Apex. Since April of 1999, Apex Gold Development LLC, has completed over 2,300 feet of development drifting, raising and sub-levels on the Apex Claim. Also during 1999 a small open pit was completed. To date approximately 20,000 tons of ore has been crushed and 11,000 tons milled. The difference is currently stockpiled. Diamond core drilling is scheduled to confirm previous drilling and plan the next levels down.

In 1993 Kennecott estimated from their drilling a geologic resource of approximately 500,000 ounces contained in the Kearsarge and Big Vein shear zones located on the Apex Claim. This includes a substantial amount of lower grade ore that is not of interest to us. We are concentrating on the higher grade lenses and shoots.

The mill has also been substantially upgraded during this time. A larger Merrill-Crowe circuit has been added to process flotation and gravity concentrates. Direct smelting is then performed, at the mill, producing a doré gold-silver bar. An additional rod mill has also been installed which has increased through-put to approximately 280 tons per day and produces a finer grind which has increased gold recoveries. Numerous other additions and refinements have also been carried out.

Currently ores are being mined from the 7140’ level of the Lower Apex Mine. They are then trucked seven miles to the milling facility located up Prospect Gulch directly west of Virginia City. Here the ores are milled and doré bars are produced. Mine expansion is on going with deeper development planned after a round of diamond drilling.

We are fully permitted and bonded both at the mine and the mill and work closely with Federal, State and Environmental agencies to comply with all regulations. Likewise the bulk of the permitting and bonding is in place to perform the various exploration and development projects we intend pursuing this year.

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Photo #2: M&W specializes in gravity-bulk flotation quality concentrate production.

>The Crushing Circuit at the M&W mineral processing Mill site can accommodate 750-1000 tons per day (30-50 tons per hour). The Mill Grinding Circuit provides up to 280 tons per day mill feed to the gravity and/or bulk flotation concentration circuits. Pictured here is a portion of the gravity circuit. The Cyanide Circuit presently leaches 10-12 tons per batch, recovering gold and silver by Merrill-Crowe zinc precipitation.

Photo #3: Our 1300 square foot fully equipped Metallurgical Laboratory is capable of performing all forms of metallurgical test and production mine work.

Photo #4: The entrance to the 7140’ Level of the Apex Mine. One and a quarter and two and a half yard (LHD) loaders are the primary means of moving ore and waste at the mine.

Roy controls numerous other claims in the district that have seen varying degrees of exploration. He and his staff all feel there are excellent opportunities to find and exploit additional deposits similar to the Apex. In many cases the first and/or second round of exploration has already been completed and simple step-off drilling is all that is needed to develop additional resources. In other cases old newspaper accounts and maps document mines that were shut down for a variety of reasons but today may be mined using modern methods. The district could easily become one of the larger underground producers of gold in Montana if a well thought out exploration and development program was instigated.

Geology

The property is underlain by some of the oldest rocks in Montana, Archean-aged gneiss inter bedded with iron formation, dolomitic marble, graphitic schist, and amphibolite. These were intruded by pegmatite and ultramafic dikes. Gold occurs along northeast trending shear zones cutting the gneiss. The gold is found in the free state and 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.

Exploration Results, Plans and Properties

Extensive exploration has been conducted on the property over the past 15 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 their drilling in Alder Gulch indicated a 1.6 million ounce geologic gold resource with a district wide potential of over 12 million ounces.

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, it was estimated to contain 279,000 tons of 0.2 opt Au and 0.3 opt Ag, or approximately 52,000 ounces gold.

It’s interesting to note that the highest surface sample collected by Kennecott anywhere on the property was from the Atlas Group and returned an assay of 36.63 ounces per ton.

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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Kennecott estimated, from their drilling a indicated resource of 2,400,000 tons grading .069 ounces per ton giving a total of 167,000 ounces of gold.

A program of trenching and drilling is planned to evaluate the mineralization in more detail. This program is designed to delimit higher grade shoots and core zones that would be amenable to small open pit or underground mining within the resource Kennecott defined.

General Shaftner and Keystone Mines

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 Shaftner 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. Kennecott also completed a large soil geochemical grid on all of Roy’s properties. One of the largest and highest grade soil anomalies covers the Keystone/General Shaftner vein zones. This anomaly is over 4000’ long and up to 400’ wide. Surface samples from the area run as high as .501 ounces per ton.

Roy is currently reopening the lowest cross cut on the General Shaftner in order to evaluate it for underground mining and plans to reopen the lowest level on the Keystone.

Bartlett Mine and Four Cs Area

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.

Only limited modern exploration has been done on these prospects. The mineralized portion of the Bartlett vein is on a very steep slope beside a massive silicified dolomite outcrop. Surface samples have ran as high as .972 ounces per ton. Its inaccessibility has discouraged trenching or drilling 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 us.

Directly across the gulch to the south from the Bartlett is the Four C’s claim group. This group covers the continuation of the Bartlett vein structure and other parallel veins. In 1987 United Reef Petroleum dug two trenches on the group. One trench returned an average of .220 ounces per ton over a width of 35’. The other appears to have missed the vein. This area also displays a soil geochemical anomaly 1600’ long and up to 200’ wide indicating that the zone may be intact over that distance.

We plan to off set the URP trench with additional trenches in order to define the strike length of the mineralization. Drilling will then be conducted to define the down dip continuity of mineralization.

Oro Cache Mine

The Oro Cache mine has seen only limited modern exploration. It was one of the richest mines in Alder Gulch, discovered in 1864. It was mined from 1864 to 1872, again from 1889 to 1892, and only sporadically thereafter. Gold occurs in quartz-ankerite-pyrite breccias and stock work 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.

We currently plan to reopen the lower most cross cut and continue it to intersect the Oro Cache vein. If warranted drilling will be conducted to evaluated the down dip continuation of the mineralization.

The Sphinx

Although no mining has ever been conducted on the Sphinx patented claim, Kennecott in 1993 discovered a mineralized shear zone running northeast-southwest over 1000’ long. Surface rock chip and soil sampling confirmed that it is a gold system with up to .192 ounces per ton over 8’ in one small trench.

We plan additional trenching to offset Kennecott’s findings and drilling if the trenching proves favorable.

Little Lode Claim Group

Purchased from Hanover Gold Company in 2002 the Little Lode Claim Group is composed of one patented and four unpatented claims. These claims border our Atlas and Oro Cache Claims that lie to the east. Within the group 18 adit levels explore four different gold quartz veins. The veins are noted for wire gold specimens that can be found both underground and on the various dumps.

Last worked in 1938 by Barney Vike the claims have been idle since.

Chevron reconed and sampled the area in the 1980s and found gold values of up to 7 ounces per ton on one of the upper mine dumps.

In 1990 a mining engineer with the Montana Bureau of Mines and Geology mapped and sampled the Number 8 Adit on the Little Lode Patented Claim. From his work he identified a indicated resource of about 5000 tons grading .30 - .40 ounces per ton.

The claims are of interest to us because of the number of known veins on the properties, the high grade nature of the ores that were mined historically and the lack of any modern exploration conducted.

A modest exploration program is scheduled for the properties this coming season.

Other Lode Claims

During the 2002 field season 68 lode claims were located and added to Mr. Moens land position. These claims, boarder and are contiguous with claims already controlled by the company. Formerly the claims were controlled by an investment group from Minnesota. During the 1980s that company conducted exploration, on the claim group, that identified 16 veins and mineralized gold zones. During the course of their investigations in excess of one million dollars was spent acquiring, maintaining and exploring the claim group.

In 1985 an independent consulting geologist estimated, from drill hole data and surface and underground sampling, a total possible gold resource on the properties, now controlled by Roy Moen of approximately 200,000 ounces gold equivalents. He then recommended an aggressive drilling program that would continue to explore these gold occurrences and hopefully up grade them to proven and probable reserves. This program was never carried out due to financing difficulties.

Some of the veins that were discovered, on this group, appear to be continuations of veins that occur on Mr. Moens original claims. It’s felt that these additions aid in our ability to carry out and expand on our planned exploration and development programs.

Lode – Placer Claims

Research, personal observations, field exams and conversations with old timers renewed our interest, over the course of last year (2002), of the possibility of a "buried channel" beneath volcanic extrusive rocks to the north and east of the historic Alder Gulch placer occurrences. Most researchers agree that the source of the placer gold, that’s been found in the gulch, originated from lode sources along and in the headwaters of the drainage. A significant amount of evidence suggest that the lode gold deposits, in the area, are considerably older then the volcanic rocks which means a long period of erosion took place prior to the deposition of the volcanic rocks. If this is the case then paleo-drainages, containing placer gold, should exist beneath the volcanic flows.

Our observations are not new. Practically since the discovery of the gulch in 1863 miners have been speculating on the existence of a channel or channels beneath the flows. Limited drilling has been conducted over the years in the hopes of discovering just such a channel. To date no conclusive find has been made, however historic efforts were very restricted by drilling technology and the pell-mell nature of the property ownership.

With the above in mind we located six placer and lode claims, last year, that cover what we feel may be the most likely area to drill test this hypothesis.

This exploration play is certainly speculative but nonetheless if a channel is found it would probably be one of the more significant gold discoveries made this decade.

Summary

Roy and Marlene Moen control a significant portion of the Virginia City Mining District in southwest Montana. They are currently actively mining and milling ore from the Apex underground mine. To date major and junior mining companies have identified 1.6 million ounces of drill inferred gold, with a potential of up to 12 million ounces. Numerous other gold targets have been identified throughout much of the claim block. Limited drilling, surface rock chip, soil geochemistry and other mines outside of the Apex Mine area demonstrates the persistence of the gold mineralization.

RADERSBURG MILL

Radersburg Mill is located 9 miles west of Hiway 287 and approximately 20 miles southwest of Townsend in Broadwater County located in Montana. The milling facility sits on 20 acres of patented ground and is one of 3 permitted custom mills in the State of Montana. The Mill was built in the early 1980's at a cost of 2 million dollars. The facility has two settling ponds. The first of two is 180,000 tons and the second is newly constructed 30,000 ton cyanide pond. There are two each, 30 mill hypalon liners and 7 monitoring wells on the property. The mill was aquired by Hanover Gold in 1995 and according to their public perspectives and 10K reports a total of 1.6 million dollars was spent to aquire and refurbish the mill.

The mill was initially a Gravity and Carbon in Leach Cyanide Mill. The present Permit is issued to the Geneva Mill LLC and the Montana Operating Permit #0097. The Mill is still permitted for Gravity and Flotation only. The Cyanide Permit would need to be reapplied for under the new rules and regulations enacted by the Legislation of Montana in 1996. The interior milling equipment is still in good shape and with the exception that some of the pumps are missing could be made operational in a relatively short time. Some of the exterior crushing equipment has been taken to Virginia City for refurbishing and several of the conveyors have been sold.

There is a detached office/lab building with Fairbanks Morris Scales, a newly constructed shop adjacent to a 16' x 40' lean-to. The facility is paid for, there are no liens against the property and the taxes are paid up to date. The mill is located on the southeast flank of the Elkhorn Mountains and is 9 miles south east of Pegusus' Diamond Hill Mine.

This Mill is for sale for $3,825,000.00, lease or joint venture. Call 406-843-5342 for further information and current inventory list.