BRIGGS MINE

The Briggs Mine, situated in the desert of southeastern California, is an open-pit, gold leach operation constructed in 1996 and has produced over 550,000 ounces of gold since production commenced. Mining ceased at Briggs in early 2004 and rinsing of the leach pads began at that time. Residual gold production from the pads is ongoing. Re-starting the Briggs Mine in light of today's gold market is Canyon's top priority. The mine is fully permitted with existing plants, infrastructure, and mobile equipment.

Feasibility studies for both the open pit and underground mine were completed in early 2007. These studies were designed to develop an accelerated approach to putting the mine back into operation. Operating permits within the mine-plan-of-operations area remain active. Additional drilling on the Goldtooth underground structure has been completed and reserve estimate has been developed from these data. Drilling beyond the north end of the known underground mineralization proved to be successful in that a major extension was discovered reaching north of the Goldtooth Pit to Redlands Canyon. For a more in depth look at the Goldtooth structure please refer to the Goldtooth project page.

A summary of Mineral Resources at the Briggs Mine alone, with unrestrained boundaries, is shown below.

Resources

In addition, there is an inferred open-pit resource of 4.366 million tons grading 0.023 oz Au/t containing 98,600 ounces of gold and an underground inferred resource of 2.989 million tons grading 0.074 oz Au/t containing 220,557 ounces of gold. 

Reserves

The combined underground and openpit operation, based on completed feasibility studies, would produce gold at a rate of 30,000 ounces in year one of operation, 45,000 ounces in year two, 33,000 ounces in year three and 21,000 ounces in year four. The project cash operating cost, including offsite refining, through the projected mine life is estimated to be $430 per ounce of gold produced. Total capital cost is $8.25 million to initiate open pit gold production spent over a five month period. In addition, $4.6 million will be required in the next year to develop and initiate underground mining. The total project develops an IRR of 15% and a net return of $4.7 million at a gold price of $600 per ounce. A ten dollar change in gold price will impact net return by $1.1 million. Reserves developed from these studies are shown in the following table:

The open pit and underground reserves were calculated with a cut-off grade of 0.08 opt for underground stopes and 0.013 for open pit estimation and underground development material which must be mined regardless of grade. A gold price of $525 per ounce was utilized for for the open-pit study and a price of $600 per ounce was used for the underground study. The ores when crushed are expected to yield a heap leach gold recovery of between 79% and 83%. An additional 100,500 tons of mineralized material at a gold grade of 0.116 opt not included in the reserve is contained within designed underground excavations and could be extracted without additional capital development of infrastructure requirements. This material is estimated utilizing the cutoff grades used for reserve estimation.

The Briggs gold deposit is hosted by Precambrian siliceous gneiss and amphibolite which have been severely deformed by faults of Tertiary age. High-angled faults and shear zones have acted as vertical conduits that channeled gold-bearing hydrothermal fluids upwards into a series of stacked low-angle faults. The primary highangle fault system in the Briggs mine area, which is believed to be the main conduit for gold mineralization, is the north-south-trending Goldtooth fault.

Outside of the Briggs Mine permit area, we control four advance-stage exploration targets adjacent to our Briggs area claim block. Since the discovery of the Briggs gold deposit, we have developed a detailed geological understanding of this deposit type. Using this knowledge, we have identified significant gold mineralization in the Briggs area extending four miles to the north along the western flank of the Panamint Mountain Range.