GOLDTOOTH UNDERGROUND PROJECT

In 2001 and 2002, Canyon conducted an underground mining operation over a nine month period at the Briggs North ore body using modified room and pillar methods on a near horizontal, but highly mineralized structure. A total of 21,000 ounces were extracted at an average grade of 0.19 ounces per ton of gold demonstrating the potential for high-grade in the Briggs gold system. The last underground working mined across the 275 feet width of this ore body averaged 0.32 ounces per ton, based on vertical channel samples. Underground mining proceeded beyond the drilled gold reserve and was terminated as the gold price fell below $275 per ounce.

Field examination and data review at Canyon's Briggs Mine suggested that a major fault, limiting mineralization to the east, the Goldtooth Fault, may be one of the main conduits of mineralization. Many drill holes that had penetrated the hanging wall of this fault intersected unusually elevated amounts of gold at or near the fault, developing a planar configuration to the higher grade intercepts parallel with the fault. The Goldtooth fault is the single-most outstanding structure on the property and marks the contact between Precambrian gneissic crystalline rocks to the west, the hosts to gold mineralization, and Mesozoic intrusive rocks to the east.  It can be traced or followed on the surface for a distance of over six miles, striking north-northeast and dipping to the west at angles greater than 70o from the horizontal. Drilling has demonstrated that the fault flattens slightly with depth.

Gold mineralization is associated with pyrite, massive silica replacement, and dolomite introduction into the hanging wall, not exactly in the fault zone but within a 60 feet-wide swat along the hanging wall.  The knife-edge modern slip plane defines best the strike and dip of the fault, but the broad intense quartz-carbonate alteration zone represents an older pyrite gold-bringing hydrothermal event.  

The Goldtooth Fault formed the immediate footwall to one of the mined ore bodies on the south end of the mine complex (the Goldtooth Pit). Several drilling campaigns have developed the resources within the general fault zone extending from the Goldtooth Pit to Redlands Canyon to the north, a distance of 3,000 feet. Some of the better drill intersections are shown below:

To date about 100 drill holes have penetrated the Goldtooth structure, defining and limiting gold mineralization over the explored strike length. Gold values of potentially underground-mineable grade have been followed over a vertical distance in excess of 400 feet with true widths from 3 feet to over 20 feet.  Gold grade is generally in direct proportion to the amount of pyrite, some of which is oxidized to limonite. This higher grade zone is surrounded by a lower grade halo, which, where the higher grade is narrow, will have to be mined as dilution with the higher grade material.