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| | |  | | | |    The Converse Project is one of the largest undeveloped gold resources in Nevada. The Converse resource calculation was confirmed by a 43-101 report prepared by Watts, Griffis and McOuat (WGM) dated September 27, 2004. With a successful drilling program and a higher gold price, the WGM report increased the Measured and Indicated gold resources by over 70%. Converse Project Resources
Mineral Resources have been categorized in accordance with classifications defined by the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM"). Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Measured and Indicated Mineral Resources are that part of a Mineral Resource for which quantity, grade can be estimated with a level of confidence sufficient to allow the application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified. The Converse resource has not been fully defined and has potential for the discovery of significant new gold ounces. Property & Location The Converse Project lies within the prolific Battle Mountain/Cortez Trend (50 Moz Au). Converse is located 8 miles south of the Newmont Lone Tree Mine and 5 miles east of the Glamis Marigold Mine. Converse encompasses 12 sections (approximately 7,767 acres) of unpatented mining claims and fee surface and minerals that are owned or controlled by MVG. 2007 Drill Program In the first half of 2007, MVG successfully completed its +$2 million development/exploration drilling program at its Converse Project in Humboldt County, Nevada. The Converse Project drilling program provides three types of information. First, the reverse circulation holes defined the periphery of the deposit and have identified suitable areas for heaps, dumps and infrastructure. Second, reverse circulation and core holes successfully explored north-south structural trends, peripheral mineralization, placer gold in the alluvium, and deep core holes explored the deposit at depth. Third, oriented core holes generated samples for use in metallurgical and geotechnical analysis. In addition, when all assays results are available, MVG will release the results of the 7,332-foot core drill program. Highlights of the program include assay results for drill holes NK-204 with 5 feet of 0.414 opt gold and NK-190 with 5 feet of 0.299 opt gold. These are two of the higher grade intercepts drilled at the Converse Project, and MVG is encouraged that both drill holes lie several hundred feet beyond the outermost boundary of the current resource model. Sixteen of the gold intercepts greater than or equal to 0.010 opt gold are hosted in post-mineral alluvium overlying the Converse gold deposit. This placer gold is interpreted to be alluvial in origin, and derived from the upper portion of the deposit that has been removed by erosion.  Samples The 2007 Drill Program provided a substantial quantity of drill core for metallurgical testing. Where appropriate, high grade and low grade drill core composites will be prepared according to the following classifications: North Zone Oxide/Mixed North Zone Sulfide North Zone High Copper South Zone Oxide/Mixed South Zone Sulfide South Zone High Copper In some cases, ore from individual categories may not be present in the deposit in sufficient quantities to merit testing. Consequently, fewer than the 12 categories (composites) may be evaluated. Additionally, MVG will retain representative samples used for preparing the composites for later ore variability testing, once processing has been optimized. Additional ore categories may also be recommended where drilling is conducted in ore types that were not adequately represented during earlier testing. It is expected that master composites, comprised of splits from multiple individual composites, will be used for some of the more detailed testing required. Heap Leach Cyanidation Column percolation leach tests will be conducted to evaluate sensitivity of the various low grade ore types to leaching pH (lime addition) and cyanide strength. Principal objectives for these tests are to minimize cyanide consumption while maintaining acceptable precious metal recoveries and recovery rates. Because of the relatively fine crush size planned (nominal 3/8"); it will be possible to run these column tests using relatively small (3" - 6" x 10') leaching columns, in order to minimize sample requirements. This testing will probably require a matrix of six columns per composite, in order to evaluate two pH ranges and three solution cyanide concentrations. Sample requirements for each composite will depend on the diameter column selected for testing. Follow-up testing may be required, based on results from these tests. Once leach conditions have been sufficiently optimized, a heap height simulation column leach test series will follow to confirm optimized conditions, and to obtain more reliable reagent requirements and precious metal recovery rate data. These tests will consist of a series of column leach tests designed to simulated multi-lift heap leaching on a permanent leaching pad. The column tests (est. 5 per series) are run in series in a manner to obtain metallurgical balances around each simulated lift, and around the combined simulated lifts. These tests will be conducted on two master composites; one from the North Zone ore and one from the South Zone ore. Further columns for compositing and for testing conditions will be made based on results from the leach condition optimization testing. Ore variability column leach testing will follow once results from the testing described above are evaluated. The purpose for these tests will be to confirm that ore types not adequately represented during earlier testing perform as expected when processed under optimum conditions. Detailed head analyses and bottle roll testing will be performed for every composite subjected to column leach testing. High Grade Ore Testing A metallurgical testing program to evaluate a separate processing stream for higher grade ores mined from the Converse Project will likely be performed. This evaluation will make sense only if it is practical to selectively mine higher grade ores in an economical manner. Assuming that selective mining of high grade ore is practical, the following metallurgical testing program will commence. Whole ore milling/cyanidation treatment has been shown to be feasible for the column test composites evaluated during earlier testing. Gold recoveries were quite high. Cyanide consumption varied greatly. A series of milling/cyanidation tests will likely be performed on an oxide/mixed high grade master composite and a sulfide high grade master composite to optimize the following parameters: grind size (80%-65M, 100M, 150M and 200M), cyanide concentration (0.25, 0.50, 0.75 and 1.0 gNaCN/L) and slurry pH (10.5, 11.0 and 11.5). These tests will be performed sequentially - grind optimization followed by cyanide optimization followed by pH optimization - to limit the number of tests required. Confirmatory tests under optimized conditions will be performed on all six of the high grade composites listed in the Samples section of this memo. Follow-up testing will be based on results. Relatively coarse grinding is considered because of the potential for a combined flow sheet alternative (pulp agglomeration heap leaching) discussed below. Sample requirement per each of the six composites should be less than 20 kg. A Gravity Recoverable Gold (GRG) test is for the oxide/mixed high grade master composite and the sulfide high grade master composite. This standardized testing procedure will provide an accurate indication of the maximum possible gravity recoveries from the two Converse high grade ore types. Results from these tests will be used to determine whether further evaluation of gravity concentration is warranted. Sample requirement per composite should be 10 kg. A scoping level evaluation of bulk sulfide flotation processing for the six high grade composites described in the Samples section of this report will be performed. This evaluation will include grind size sensitivity testing, and a limited amount of reagent optimization testing. Cleaner flotation will be evaluated for production of high grade concentrates, and in the case of the high copper ores, to determine if a high grade copper concentrate can be produced. Sample requirements for each composite should be less than 25 kg. Pulp Agglomeration Testing A testing program for evaluation of pulp agglomeration heap leach processing, based on results from the testing described above. As discussed earlier, practicality of selectively mining and processing high grade ore should be closely considered before proceeding with such a testing program. The relative tonnages of high grade and low grade ore from the Converse Project will also be an important consideration for potential pulp agglomeration processing. Pulp agglomeration heap leaching is simply a combined process whereby tailings generated from processing the milled, high grade ore are agglomerated onto the crushed lower grade ore before heap leaching. This processing presents a number of potential advantages over conventional milling and/or heap leaching. Pulp agglomeration allows for the tailings from a conventional milling process (cyanidation, gravity or flotation) to be leached on a heap over a long period of time, thereby incrementally increasing metal recovery from the higher grade ore. Because the tailings are placed onto the heap, a conventional tailings impoundment may not be required. In the case of the higher copper ores present in the Converse deposit, pulp agglomeration allows for the potential removal/recovery of copper from the high grade ore before placement on the heap, potentially decreasing cyanide consumption in the heap. A detailed testing program to evaluate pulp agglomeration processing cannot be made until some of the testing described above has been completed. Geology The Converse Project is located in an alluvial covered area of north-central Buffalo Valley. Exploration drilling of 229 holes (MVG 114 holes and Cameco, etal. 115 holes) on 400 ft. and 200 ft. centers has defined a 0.015 oz. /ton bulk tonnage gold deposit beneath alluvial cover. Converse is an intrusive-centered gold-silver hornfels/skarn deposit containing minor base metal mineralization. A multi-phased intrusive with a core of diorite and a shell of tonalite has intruded late Paleozoic siliciclastic sediments of the Havallah Formation. The intrusive is believed to be late Eocene (41 Ma) in age ( Mo dating at Converse) which is the same age as many of the major Nevada deposits ( Post-Betze, Pipeline, Getchell and Phoenix-Fortitude). The intrusive appears spatially controlled by the major intersection of north-trending and northwest-trending faults. The gold-silver mineralization is closely associated with the development of retrograde skarn/sulfide alteration. Table 1 illustrates the representative reverse circulation drill intersections within the resources contained in the Converse project. CONVERSE DEPOSIT - REPRESENTATIVE RC DRILL INTERSECTIONS
Exploration Model Ore deposit location along the Battle Mountain Gold Belt is strongly controlled by major fault systems that bring favorable host rocks into position along regional thrust faults, and introduce metal-bearing magmatic episodes into these rocks along normal faults. Converse has been interpreted to be associated with several regional mineralizing fault trends that can be explored beneath cover with geophysics and deep drilling on nearby lands controlled by MVG. Several areas immediately adjacent to the known deposit at Converse will be tested first. The Converse deposit itself is open at depth and future drilling will be directed at extending the deposit to depth. Metallurgy Metallurgical testing has generally focused on the evaluation of Converse for heap leach cyanidation treatment. In general, test results have shown that the Converse material is amenable to heap leach cyanidation treatment at relatively fine (3/8" and finer) feed sizes. Gold recoveries tend to be higher from the oxide and mixed rock than from the sulfide material. The material appears to be quite sensitive to crush size, and coarsening the crush size to 1 ½" resulted in substantially lower gold recoveries. There did not appear to be a significant improvement in gold recovery obtained by crushing to ¼ "in size. Cyanide consumptions varied significantly, and in some cases were very high. Cyanide consumption tended to increase with increasing copper content and with decreasing leach solution PH. The Converse samples evaluated were consistently amenable to milling/cyanide treatment at a nominal 200M feed size. Gold recoveries ranged from 96%-98%. Cyanide consumptions varied greatly and tended to increase with increasing copper content. A cursory evaluation of gravity concentration treatment was performed on the samples and used for column testing. Results varied, but in general, the Converse material did not respond particularly well to gravity concentration. No evaluation on flotation of Converse material appears to have been conducted. Overall current testing shows good potential for commercial heap leach processing of the Converse material. It is expected that a relatively fine crush (1/2' to 3/8") will be required to obtain optimum recoveries. Crushing to this size will require tertiary crushing in a commercial plant. Significant potential exists for selectively mining high and low grade rock from parts of the Converse deposit. The higher grade material may justify more expensive processing alternatives (milling/cyanidation, gravity concentration and flotation concentration). Consideration of the potential for recovering contained copper, silver, and molybdenum in a saleable form will also be evaluated. Photos & Maps
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