The Eddy Gulch gold deposits are contained in the 1,000 foot wide shear zone of the Soap Creek Ridge Thrust (SCRT), which strikes roughly east/west to northeast and dips south to east.

The Soap Creek Ridge Thrust was created by a plate margin collision-accretion event that began during the Late Triassic age (223 ma) when the Stuart Fork formation (blueschist and eclogite facies siliceous metasedimentary and mafic volcanic rocks) was thrust over the greenschist facies Hayfork and North Fork metasedimentary and metavolcanic terranes. The capping-sealing effect of the Stuart Fork terrane concentrated the late Jurassic-early Cretaceous age (140 ma +/-) deposition of upwelling, intrusion related hydrothermal alteration and mineralization in the uppermost horizon of the underlying greenschists (Elder and Cashman, 1992). This mineralization is exposed on surface in the Liberty Mining District and numerous other gold mining districts concentrated along the 65 mile long trace of the SCRT. The SCRT is projected to extend in strike much further to the east under Tertiary sedimentary and volcanic rocks, and on dip under Mount Shasta (Elder and Cashman, 1992).

The most well developed fissures in the thrust zone formed along contacts between relatively soft carbonaceous schist and slate and harder bedded chert. The fissures (and veins) vary in dip and strike conforming to folding and dislocating of host rocks.

Altered dikes and sills of varying composition, locally known as "cab" or "porphyry" are generally oriented parallel to the veins, often along the footwalls or hanging walls. The porphyry sills predate the veining. High-grade gold deposits often occur along the heavily pyritized porphyry/vein contacts.

The gold occurs mostly free, a lesser percent associated with pyrite and arsenopyrite, which make up about 1 to 2 percent of the vein material.

There are three productive veins on the property. The Klamath and Union Mines, and the southwestern workings of the Mountain Laurel Mine, are located on the primary vein that dips south and east with the thrust. Most of the Mountain Laurel Mine is located on a northwest dipping conjugate vein (Reverse Dip vein) that appears to conform to an anticlinal fold. The Anna Johnson mine is located on a segment of vein separated from the primary vein by a crossing fault (Stevens Gulch Fault).

Ore bodies are lenticular in shape, and occur in east dipping shoots that rake slightly to the north. High grade gold bearing structures vary in width from 2 to 24 feet, averaging about 4 to 6 feet. They are often composed of a porphyry sill and two or three closely parallel veins separated by quarts veinlet-shot carbonaceous and micaceous gouge seams. Lower grade "halos" (0.10 opt +/-) around the higher grade veins average about 25 feet wide.

The nearby Black Bear mine is in the same thrust zone as the Eddy Gulch Group and was stoped to a depth of 900 feet. The Klamath Mine was stoped to a depth of 600 feet, and the Mountain Laurel to a depth of 500 feet. Sulfide ore is reported to have been mined from the Mountain Laurel and Anna Johnson Mines at depths ranging from 100 to 400 feet. The similarity of the mesothermal geology of the Liberty mines and the deep mines of the Mother Lode region suggests that ore will be continuous to great depth.

Projection of Deeper Reserves

It is logical to assume that since the average recovery (conservatively estimated) from reported production was 0.565 ounces of gold per ton, the recovery from newly discovered reserves will be comparable. This assumption is further supported by the widespread high grade underground assays from the Eddy Gulch Mines underground workings.

The projection of vast underground reserves is based on the placer and lode gold yield from Eddy Gulch, and the geologic characteristics of the deposit. The flat dipping, mesothermal vein system should have virtually unlimited mining depth. Mesothermal (mid-depth deposition) systems have greater vertical productive ranges than the more common epithermal (shallow deposition) systems. Numerous mines in the mesothermal Mother Lode were mined 5,000 feet deep on very steeply dipping veins. The flat dip of the Eddy Gulch Mines will allow for much greater down dip production per unit of vertical depth. 5,000 feet of mining depth represents only a small fraction of that depth vertically.

The existing workings across the properties averaged about 500 feet in depth and produced about 100,000 ounces. Carrying that 100,000 ounces per 500 feet of depth down dip to 3,000 feet, and assuming 0.5 opt recovered (2 tons per ounce of gold) and $200 per ton mining and milling costs, that would yield about 500,000 ounces. Assuming $1,000 gold at .850 fineness, that would yield a $255 million profit. With the same assumptions, mining to 5,000 feet would yield 900,000 ounces and a profit of $405 million.