Sutter Gold Mining Inc. (TSX VENTURE: SGM) ("Sutter" or the
"Company") is pleased to provide an update on the development
efforts for the Lincoln Mine Gold Project ("Project").
Surface Construction and Scheduling
Sutter is completing final designs, final construction documents
and contractor selection to allow for the construction of surface
facilities to begin in September 2011. Sutter has obtained approval
from the Amador County Land Use Committee for preliminary
architectural plans for the mill complex and shop/staff services
building and ancillary structures. The Company has obtained a
demolition permit to remove existing temporary structures and allow
for the construction of new surface facilities. The Company has
obtained approval of construction-level plans and specifications
for the two mine waste units, the Waste Rock Pile (WRP) and Surface
Fill Unit (SFU) that will be used to store and dispose of
development rock and mill tailings, respectively.
Sutter and its consultants are finalizing construction-level plans and
specifications for certain earthworks, the mill complex, shop/staff services
building and ancillary structures. These construction-level designs will be
used to obtain building and grading permits, as appropriate, to solicit bids
for contractors and complete the contractor selection process for surface
facilities. The Company has established the following September milestones
necessary to complete the final engineering and design work and file for
construction permits:
-- Water supply line for fire suppression
-- Grading plans for the Tailings Processing Area, SFU access road and
employee parking
-- Building plans for the Shop/Staff Services building
-- Building plans for the Mill Complex
The Company initiated the contractor selection process for surface
facilities and improvements on August 3rd when a pre-bid walk-through was
conducted with local general engineering, excavation and concrete
contractors. The walk-through was attended by at least 8 contractors with
several indicating interest in bidding for the work following the walk-
through. Sutter has established the following September milestones related
to contractor selection and award:
-- Demolition of existing temporary structures contract award and job
completion
-- Excavation and grading contract award for the Tailings Processing Area,
SFU access road, employee parking and WRP construction and job start
-- Installation of fire suppression water supply line contract award and
job start
-- Shop/Staff Service Building construction contract award
-- Mineral Processing Facilities contract award and excavation start
Mine Schedule and Sequencing
Final review of the stope targets and sequencing with the input
of newly appointed VP - Exploration and Geology, Steve Zahony is
underway. This study will finalize the initial 13 stope panel
targets and provide the final schedule to be included in the mining
contract documents. To date, 17 potential mining contractors have
been contacted, evaluated and ranked according to qualifications
and availability. Of those, six candidates have been selected for
inclusion in the contract bidding process. The underground mining
contractors pre-qualified for the bid process include in no
particular order; DMC Mining Services, Mark A Suden Mining
Construction, Zereko Mining, Dumas Contracting Ltd., Mining and
Environmental Services LLC and Procon Mining & Tunneling,
Sutter and its consultants are drafting bid documents for the
underground work including pre-production development work and
production mining. The Company plans to complete bid documents for
the underground work by October. This will allow ample time for the
anticipated six months of pre-production development work planned
to begin by year end.
Equipment Procurement and Related Savings
Sutter has purchased or secured by deposit major components, new
and used, of the milling and select mobile equipment for the
Project and has taken delivery of several items. The evaluation and
selection of used equipment has been conducted with quality
assurance/quality control as a guiding principal by Sutter and its
consultant, Paul E. Danio Associates, an experienced mill designer,
fabricator and operator. The following table summarizes major
equipment purchases and associated savings to date. Based on the
evaluation and selection process Sutter estimates that there will
be approximately $65,000 in residual used equipment refurbishment
costs and delivery charges yet to be incurred and not included in
the table. To date the Company has purchased or otherwise secured
equipment representing approximately 25% of the equipment budget.
Cost savings realized to date for the capital equipment purchases
are significant, at approximately 40% below budget. Sutter is
sourcing and acquiring additional equipment as necessary.
----------------------------------------------------------------------------
Lincoln Mine Project Equipment Savings to Date
----------------------------------------------------------------------------
Budget Actual Savings
Item ($US) ($US) ($US)
----------------------------------------------------------------------------
12"x36" Pioneer Jaw Crusher 21,500 17,000 4,500
----------------------------------------------------------------------------
3'x8' Vibratory Screen(i) 6,500 - 6,500
----------------------------------------------------------------------------
4'x12' Belt Feeders (3) 36,000 28,500 7,500
----------------------------------------------------------------------------
6'x12' Marcy Rod Mill, complete 80,000 40,000 40,000
----------------------------------------------------------------------------
Krebs 10"x4" Hydrocyclone 7,500 3,500 4,000
----------------------------------------------------------------------------
Denver Equip Co. Flotation Cells (6),
complete 130,000 45,000 85,000
----------------------------------------------------------------------------
3'x12' Marcy Regrind Ball Mill, complete 15,500 15,000 500
----------------------------------------------------------------------------
6', 6 disk Denver Co. Disk Filter 72,000 70,000 2,000
----------------------------------------------------------------------------
Assay Laboratory Equipment (90%
Complete) 150,000 60,000 90,000
----------------------------------------------------------------------------
Ingersoll-Rand 750CFM Electric Air
Compressors (4), complete 80,000 70,000 10,000
----------------------------------------------------------------------------
Cat 938 Front End Loader 140,000 85,000 55,000
----------------------------------------------------------------------------
Site Support Vehicles 26,000 24,300 1,700
----------------------------------------------------------------------------
Total 765,500 458,300 306,700
----------------------------------------------------------------------------
(i) included with jaw crusher
Permitting
Sutter continues to focus on the remaining permitting activities
with particular emphasis on updating existing permits for changes
in operations and equipment, construction-level permits
(demolition, building and grading permits), air quality permits and
the federal Clean Water Act Section 404 Permit and related permits
and approvals to fill waters of the U.S.
With respect to the Section 404 Permit required to fill
approximately 0.75 acre of waters of the United States, the Company
submitted an application to the Sacramento District of the U.S.
Army Corps of Engineers (USACE) in March, 2010. The USACE published
the required public notice on June 17, 2011 to solicit comments
from responsible agencies and interested parties. The USACE
received only four responses including the US Environmental
Protection Agency, which had no substantive comment, two adjacent
landowners and one citizens group prior to the close of the public
comment period on July 16, 2011. The Company, along with its
consultants are working with the USACE to finalize the permit
documents and obtain the Section 404 permit. In addition, the
Company is working with other Federal and California State agencies
with which the USACE consults or requires approvals to complete
their process including routine water quality sampling and a tree
survey of the minimal area to be impacted by the Project.
The Company retained SCS Engineers ("SCS"), a nation-wide firm
with expertise in air quality permitting, to assist in obtaining
the required Authority to Construct permit (ATC) for the project.
Having completed a preliminary analysis of potential air quality
impacts and permit requirements, the Company and SCS scheduled a
pre-application meeting with the Amador County Air Pollution
Control District (ACAPCD) in July 2011. Based on direction from
ACAPCD and their consultant, Sutter is working with SCS to complete
and file an ATC application by the end of August 2011. The ACAPCD
has indicated that once the completed application package is
submitted, they will carry out a completeness review within 30 days
resulting in expected issuance of the ATC permit within
approximately 60 days of the application submission.
As stated previously, Sutter obtained approval of preliminary
architectural designs for the Mill Complex, Shop/Staff Services
Building and ancillary structures from the Amador County Land Use
Committee that allows final construction-level plans to be
completed. Through the review process Sutter worked closely with
the Committee, County Planning Staff and the public to provide
information, including samples of building materials to demonstrate
that the designs and materials were consistent with the existing
Conditional Use Permit for the Lincoln Project. This permit imposes
specific requirements on the structures as they are located in an
area of historic mining and visible from Old Highway 49, now a
County road.
On August 10, 2011, Sutter received an amended Permit to Use
Diesel Engines Underground from Cal-OSHA's Mining and Tunneling
Unit. The Company had requested the amendment to remove certain
equipment no longer used at the site and to add recently acquired
mobile equipment. Although not requested by the Company, Cal-OSHA's
Mining and Tunneling Unit also favorably amended the Underground
Classification for the Lincoln Mine Project. The Lincoln Mine is
now classified as "NonGassy with Special Conditions" by the Mining
and Tunneling Unit, the Special Conditions requiring planned
operation of positive mechanical ventilation and associated
monitoring.
On July 12, 2011, the Environmental Health Department of the
Amador County Land Use Agency approved a revised Onsite Sewage
Disposal Permit for the Lincoln Mine Project. The permit allows for
construction and operation of an engineered on-site system to
dispose of domestic-quality waste-water that will be generated by
the project as presently conceived.
As previously stated, the Company obtained a demolition permit
from the Amador County Building Department on August 16, 2011. The
permit allows for demolition of certain temporary structures that
will be removed prior to construction of new surface facilities.
Sutter is poised to work with Amador County Public Works Department
and the Building Department to obtain the required grading and
encroachment permits and building permits as soon as
construction-level plans and specifications are finalized.
Typically, grading permits are available within 10 days of
submittal of an application. Building permits may require a similar
time for approval, excepting complex structures that may require
more time.
Warrants
Sutter has 12,794,994 warrants with an expiration date of August
22, 2011. Based on warrants already exercised the Company expects
greater than 96% of the total warrants will be exercised on or
before the expiration date resulting in proceeds of approximately
C$1.8 million that will be used for ongoing development of the
Lincoln Project and corporate expenses.
About Sutter
Sutter is a growth-oriented exploration and development company
preparing to become a North American gold producer. The Company has
two projects: the Lincoln Project located in Amador County,
California and the Santa Theresa Project located in the Northern
Baja region of Mexico. Currently, the Company's primary focus is
the evaluation and development of the Lincoln Project, beginning
with the shallow portion of the Lincoln-Comet ore zone of the
Lincoln Project, located on the California Mother Lode Gold Belt.
The Lincoln-Comet and Keystone zones have a NI 43-101 compliant
Indicated Resource estimate (completed in February 2008) of 612,400
tonnes (673,600 tons) grading 11.3 g/t Au (0.33 oz/ton) containing
223,000 ounces of gold and Inferred Resources of 2,161,700 tonnes
(2,377,900 tons) grading 6.6 g/t Au (0.19 oz/ton) containing
458,900 ounces of gold.
Sutter currently controls approximately 3.6 miles of the Mother
Lode of Amador County, with 90% of the property still unexplored.
Potential exists both at depth and along strike of the known
mineralized zones on both the footwall and hanging wall. The
120-mile long Mother Lode Gold Belt produced over 13 million ounces
of gold historically with 7.9 million ounces originating from the
10-mile long segment between Jackson and Plymouth where the Lincoln
Project is strategically located. Properties under the Company's
control include seven historic mines with significant historic gold
production totaling over 3.5 million ounces or 27% of the historic
gold production from the Mother Lode. Historic mines located north
and south of the Lincoln Project in the Jackson to Plymouth segment
of the Mother Lode success fully mined gold to depths of 4,500 and
6,300 feet, respectively.
In Mexico, Sutter holds the rights to the geologically similar,
high-grade El Alamo district of northern Baja, where historic
mining to the water table produced mined grades of 30 to 60 g/t
gold. Initial exploration with its joint-venture partner, Premier
Gold, has demonstrated the extension of high-grade veins.
ON BEHALF OF THE BOARD OF DIRECTORS:
James Crombie, President, CEO & Director
Sutter Gold Mining Inc.
Forward-Looking Statements
This news release contains "forward-looking information" under
Canadian securities law. Any information that express or involve
discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions or future events or
performance (often, but not always, using words such as "expect",
"anticipate", "believe", "plans", "estimate", "scheduling",
"projected" or variations thereof or stating that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved, or the negative of any of these terms
and similar expressions) are not statements of historical fact and
may be forward-looking information. Forward-looking information
relates to, among other things: the price of silver and gold; the
accuracy of mineral resource and mineral reserve estimates; the
ability of the Company to finance its operations and capital
expenditures; future financial and operating performance including
estimates of the Company's revenues and capital expenditures and
estimated production.
Forward-looking information is subject to a variety of known and
unknown risks, uncertainties and other factors that could cause
actual events or results to differ from those reflected in the
forward-looking information, including, without limitation, risks
relating to: fluctuating commodity prices; calculation of
resources, reserves and mineralization and precious and base metal
recovery; interpretations and assumptions of mineral resource and
mineral reserve estimates; exploration and development programs;
feasibility and engineering reports; permits and licenses; title to
properties; recent market events and conditions; economic factors
affecting the Company; timing, estimated amount, capital and
operating expenditures and economic returns of future production;
operations and political conditions; environmental risks; and risks
and hazards of mining operations. This list is not exhaustive of
the factors that may affect any of the Company's forward-looking
information. Forward-looking information about the future is
inherently uncertain, and actual achievements of the Company or
other future events or conditions may differ materially from those
reflected in the forward-looking information due to a variety of
risks, uncertainties and other factors. Although the Company has
attempted to identify important factors that could cause actual
results to differ materially, there may be other factors that cause
results not to be as anticipated, estimated, described or intended.
Accordingly, readers should not place undue reliance on
forward-looking statements or information. The Company's
forward-looking information is based on the assumptions, beliefs,
expectations and opinions of management as of the date of this
press release, and other than as required by applicable securities
laws, the Company does not assume any obligation to update
forward-looking statements and information if circumstances or
management's assumptions, beliefs, expectations or opinions should
change, or changes in any other events affecting such statements or
information. For the reasons set forth above, investors should not
place undue reliance on forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Sutter Gold Mining Inc. Robert Hutmacher Chief
Financial Officer 303 238 1438 ext. 22
bhutmacher@suttergoldmining.com www.suttergoldmining.com
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