John H. Ferguson

PO Box 2030

Durango ,CO ,USA

1 February 2008

Gerald J. Blech

P.O. Box 233

Bayfield, Colorado 81122

Mr. Blech,

Herewith is submitted a summary report covering the Taurus Propertiesnear Payson Arizona

Further here are the 9 items on which further information was required:

1. Topographic and geological maps are included in the book Mr. Blechsubmitted.

2. Engineering layout for placer is included in the books. Detailedengineering layout for hard rock minerals requires detailed geology first.

3. Geologic sections are included in the book.

4. No histogram can be constructed as the drill logs were among the datawhich were destroyed by fire.

5. The general configuration of the gold bearing alluvium/colluviumareshown in the book.

6. The geological occurrence of the hard rock gold is described in thereport and in the book. Detailed sampling, mapping, geochemistry, and coredrilling will be required to detail the deposits.

7. The control of the alluvium/colluvium is described in the book. Sometrenching and sampling has been conducted- see the book. Refer to thepictures in the following report. The nature of the deposits particularly the terraceprecludes drilling.

8. Such details as are available are listed in the various reports in thesection on placer in the book

9. Resource table follows in the report.

Sincerely,

. --~~- tST~~/~~--

. A"J~ H. Ferguson \l

Mining and Exploration

Summary: After a examination of all available information on theTaurus Project Properties followed by limited field examination the followingsummary of the mining prospects on the subject property is rendered:

The Taurus Project Properties cover and area of approximately 800 acres(324 hectares) . There are alluvial (placer) gold, gold bearing quartz veins,and disseminated copper deposits on the property.

The placer deposits are concentrated in Rattlesnake Canyon, Midget Draw, and Thompson Draw. There will likely be additional placer deposits in some of the smaller drainages which can be tested during sampling phase of placer operations of the placer deposits are listed in the files. The most recent of these 1 gives an estimate of 14,743,330 cu yd (21,668,088 st) with a gold content of .132 opt.(4.1g/st). The placer should extend for some distance both up and down stream from the sites sampled previously. This estimate indicates recoverable gold in the +1,000,000 ounces range using half the estimated grade indicated above.

There are numerous gold bearing quartz veins on the property including the Zulu, Little Maud. Delaware, Thompson, Harris Tank, and Oxbow. These veins have only been slightly explored or exploited. All of these veins can be readily core drilled from the surface. The only one of these old mines for which any kind of estimate can be inferred is the Zulu (Gila Monster) for which a reserve of + 7000 tons of ore with a grade estimated by Rohdimer at 0.714 opt (22.21g/stone) (approx. 5000 ounces) . This only covers a strike length of a few hundred meters of the over 1200 meters traced by Rhodimer. There is an undetermined quantity of ore to be located in the sulfide zone of this vein. In addition to the Zulu vein all of the aforementioned veins have all reported production , mostly of higher grade ore. No detailed sampling and mapping has been conducted on any of these veins.

There is a substantial partially explored disseminated copper ore body which contains an estimated 225,000,000 tons of .70% copper. (157,500,000lb Cu , 71,442,000 kg). It is considered likely that there may be significant quantities of gold, silver, and possibly molybdenum in this deposit

There are several barite deposits on the property which may be marketable .

1.PRELIMINARY ASSESSMENT REPORT, Taurus Mining LLC, JKP Environmental Services, Nov 7, 1994 

Conclusions: The Taurus Properties present an opportunity which is a seldom if every seen. The placer operations could be placed in operation within a relatively short period of time. A new operations plan would the principal regulatory hurdle in the start up. While the placer operation is going the gold veins and the disseminated copper ore body could be further delineated. These exploration operations would detail the limits and of the ore bodies currently know and would probably expand these boundaries.

Resource Tabulation

Tonnage assay tot gross value source

Alluvial gold

21,668,088 .132 opt(4.1g) 2,860,187 2,597,050,000 2

886,662 kg

Vein gold

7000 .714 opt. 4998 5,438,000 3 154.94kg

Copper

225,000,000 .70% 157,500,000lb 511,875,000 4 71,442,000 kg

Barite

7000 unk undetermined 5

2.Report on the Gila Monster Group, aka Zulu Mine, Gila Co. Arizona, Private Report,T.A. Rhoeimer Dec 1939

4.Donald J. Podesta, CPG Private Report Jan 1972 

5. Howell  and Nordimeyer

Vein Gold. The vein gold is mostly not reported because there is no data on most of the old mines or known veins. Only a small segment of one vein had any data. The number of veins , most of which were worked in a small way , indicate likely good tonnage of good grade material may be expected.

Kitco prices 1 Feb. Closing Au+909 Cu 3.25

GEOLOGY

The area of the mine project is primarily the Precambrian Gibson Creek Batholith, with the area on the southwestern portion of the property being Gibson Creek overlain by some Proterozoic and Phanerozoic rocks of the East Verde sequence.

According to Podesta6 all the rocks of the mine area are plutonic, medium to coarse grainedgrano-diorite to diorite. It is to be expected that these rock types will grade from one to another with some being more granitic. Podestra states that some of the rocks contain sufficient pink feldspars as to warrant description as granite.

These older (primarily pre Cambrian) rocks are intruded by thin intrusions of “greenstone” which is also classified as Precambrian. There are also larger intrusions of andesitic dikes in the granodiorite. The dikes are more readily weathered than the grano-diorite weathering to a soft light tan to dark chocolate brown color 7 .

There are a large number of quartz veins in the older rocks, most of which are probably related to Tertiary volcanic activity.

Ore Minerals

The ore minerals in the district are fully described in 8 Arizona Bureau of Mines Bulletin 130. They are summarized below:

Gold: The gold in the veins is described as being bright metallic flakes in rusty porous quartz, containing some silver. The placer gold is described as ranging from minute flakes to small flat nuggets. The placer gold is described as being of deeper color (less silver content) than the vein gold.

Silver: The silver minerals reported are native silver and cerargyrite(horn silver). In all probability these are of secondary origin. There is some silver alloyed with the native gold.

Lead: There are lead minerals in the district but not reported on Tarus property.

Copper: Sulfide minerals of copper reported include chalcopyrite (CuFeS2), bornite (CuFeS4) “peacock copper”, thought by Wilson to be primary but is more likely secondary; tetrahedrite “gray copper” was reported in the district but only in conjunction with lead minerals; covellite (CuS) was reported in the district, usually as a secondary mineral; and chalcocite (Cu2S) which is a secondary mineral and reported as not economically important in the district

Oxide minerals of copper are malachite (CuCO3.Cu(OH)2 a secondary mineral; azurite (2CuCO...Cu(OH)2, secondary rare in district; chrysocolla (CuSiO3.2h2O) secondary not important constituent of ore; diaptase (H2CuSiO4 ) rare.

Iron: Pyrite containing gold in unoxidized portions of the veins; hematite reported as important in all the gold veins and often carries flecks of free gold. When the hematite is more abundant the gold values are higher; limonite secondary mineral from oxidation of pyrite, contains flecks of free gold in the veins.

Gangue minerals: Reported gangue minerals include quartz, calcite, ankerite, fluorite, garnet, epidote, chlorite, sericite, kaolinite and barite. The barite in several veins is of possible economic importance.

Ore Deposits:

Gold Veins According to Wilson9 almost all of the metal production in the entire district is from the gold veins. The gold veins of the district are characteristically quartz veins formed in fault fissures. There has been further movement along these fault-fissures after the deposition of the vein material. In places this is reflected by crushed zones from a few inches to a few feet on

each side of the vein. Some of the crushed zones are reported to be later than the oxidation of the veins. These veins are reported to be from a few inches to several feet wide with a maximum reported with of 12 feet (approx. 4 meters). The veins generally range in strike from N 15°W to N 65°W. The dip is believed to be generally to the northeast. No indication is given in the literature as to whether the veins are normal or thrust faults. No dips are reported primarily because the underground working have become mostly inaccessible. There are some veins which are reported to be associated with “granite porphry” dikes. An exception to this general trend appears to be the veins associated with Moore Mountain. In this area the veins are not confined to the general strike reported above but form veins radial to the center of Moore Mountain, in a fashion similar to the spokes of a wagon wheel. This is similar to the veins of the Hillsboro New Mexico District where the veins radiate from a center in the Copper Flats Mine which is a porphry copper deposit. This suggests that there may be a central intrusive ore body centered in Moore Mountain which is probably several hundred feet deep. Geochemical and geophysical surveys should be employed there to determine probable drill targets. These surveys should be utilized in delineating expanded targets through out the area.

Most of the production of these veins has apparently been done in the oxidized zone. In the oxide zone (above the water table) the veins are reported to be rather porous consisting of quartz, which hematite and limonite. Some of the cavities are obviously pseudomorphs after pyrite. Locally there are reported areas of copper oxide minerals. Careful surface mapping of the geology in conjunction with geochemical exploration should outline targets for drilling of these veins at or below the water table.

Considerable sampling in the past on some of these veins and past production indicate that these veins carry values from a few grams per tonne to as much as 30 to 90 grams per tonne. While there is much sampling in the records provided these are old data which would need to be resampled and re-assayed utilizing sample techniques and assaying techniques which are conformable with current practice . There is insufficient information to project any ore resources but the indications are that there should be a considerable amount of good grade underground mine able gold ore. In some instances there may be sufficient copper mineralization to add to the value of these veins considerably.

note in the picture on the following page the highly oxidized area following the trace of the vein. These gossans are visible for some

considerable distances and even when obscured by overburden would be good targets for geochemical exploration. Several geophysical methods could also be employed.

*

Typical vein out crop gossan. The entire area adjacent to the vein is highly altered

and highly oxidized. Much of the granitic rock has been altered to clay minerals.

On the following image note the gossan can be traced from the near fore ground across the draw and up the side of the mountain.

*

In a report written in 193910 Mr. Rhodimer describes the vein on the Zulu(Gila Monster) as consisting of two high grade zones, one on the east wall and one on the west wall. The ground between these high grade zones is described as being composed of altered granite and porphry this zone being characterized as “mill grade ore” Mr. Rhodimer had visited the property in 1907 at which time the shaft had been sunk to a depth of 62 feet (18.9m). At that point he describes the vein in the west wall where the shaft was sunk as being 20 in. (0.508 m) of very high grade ore. At that point a crosscut had been driven for approximately 30 ft (9.14 m) to the higher gradeoreshoot on the east wall. The rock in-between is described as being “milling ore”. This shaft was caved at the time of his examination in 1939.

His description of the vein is quoted verbatim except for parenthetical entries:

“Vein Structure: The strike of the vein is slightly West of North, and the main strike continues through this property for a distance of about 4000 ft(1219 m), but is traceable , by outcrops carrying values for a distance of several miles. The vein, where developed on the property, will I believe, average 15 ft wide(4.57m), all of good quality mill ore, and where exposed by outcroppings is much wider than the above figure. The vein is well developed between walls of altered granite, and stands nearly perpendicular down to depth now explored.”

Rhodimer states that in addition to the main vein there are several veins of varying widths with surface exposed outcrops. There were a number of old workings which reportedly contained very high grade deposits. He further reports there is an additional large vein to the west of the main vein which will run about 20 ft (6.1 m) wide with values reported at 0.06 opt.

Rodimer took several samples which showed values up to 6 opt. He estimated the average grade to be around .714 opt. The assays he reported are tabulated below:

sample # width ft width m au equiv. $ ‘39 Au opt Au g/st

1 9 2.74 7.13 0.204 6.34

2 15 4.57 26.07 0.745 23.17

3 7 2.13 2.16 0.062 1.92

4 7 2.13 1.54 0.04 1.37

5 6 1.83 5.71 0.163 5.07

6 9 2.74 56.24 1.61 50.0

7 5 1.52 208.32 5.95 185.13

8 5 1.52 20.54 0.587 18.25

9 3 0.91 35.75 1.021 31.8

10 dump 21.32 0.609 18.95

11 20 6.1 4.46 1.27 3.96

12 ` 6 1.83 4.85 0.139 4.31

13 15 4.57 50.9 1.45 45.23

14 15 4.57 7.57 0.216 6.73

15 15 4.57 8.64 0.247 7.68

A copy of a map prepared by Mr. Rhodimer and Dorman11 is on the following page. This map indicates the samples were taken over a strike length of 800 ft (244m) and a depth of 200 ft (61m). This could indicate a possible resource of in excess of 7000 tons of good grade ore. This indicates that the vein should be sampled, geochem sampling conducted, and a detail drilling program undertaken to fully delineate the potential ore body which could be an order of magnitude larger than the old map indicates.

During field examination of the property on Jan 28 , 2007 a number of small fissure veins were observed. These veins are adjacent to fairly large zones of heavily altered granitic rocks. In some instances the alteration was to such an extent that the rocks were easily crushed by hand. The veins have visual continuity for some considerable distance. The old mining from the Spanish days12 until the most recent of the mining was confined to high grade zones in the oxidized segments of the veins. These ores were “free milling” needing only gravity concentration and amalgamation. There is anecdotal reports that there were three arastras on the property. These were probably from the Spanish mining era prior to the Mexican Revolution.

*

view of west claims, Moore Mountain on left center.

*Placer deposit in Rattlesnake Gulch Area- note the nature of colluvium in cut bank

Also note that there is almost no topsoil, a very thin layer of growth support media in all most all the area there will be insufficient salvageable topsoil for reclamation

*

Tarus Placer 2 Note the false bedrock (caliche) the white bed in foreground .

This horizon forms a very good gold trap

Alluvial gold deposits.There is a considerable resource in alluvial (placer) gold on the property. Some of the gravel was washed in small operation by Mr. Gerald Blech the current owner. In addition to this the property was evaluated by a Canadian Company DCRS13 and by MrSalazar14 .

In summary there is a large deposit of good grade alluvial gold on the property. The source of the gold is believed to be principally from the erosion of upstream gold veins. The depth of the deposits is estimated by Salazar to be 3-5 meters. The gold recovered in the different tests is described as being from microscopic to fairly course (approx. 6.5mm) The sampling was essentially

all surface sampling with some small trenches. The DCRS sampling was all random surface sampling.

In a typical placer deposit there will be considerable enrichment on bedrock or on a false bedrock. The false bedrock reported is the literature is a limestone deposit. It is assumed that this will be similar in nature to the caliche false bedrock of the Hillsboro NM district with which I have considerable experience. The gold on this false bedrock and extending sometimes several cm is a highly enriched zone. The caliche or fresh water deposited limestones are generally soft when wet but get quite hard when dry. This has bearing on the recovery methods discussed in a later section.

Limited field observation suggests that much of the gold bearing deposits are not limited to the alluvium but that the hillside quaternary colluvium is gold bearing. The hillside colluvial covering appears to have widespread gold which is considerably enriched where the colluvium us cut/undercut by intermittent streams. A small sample taken from an area which should have shown now gold showed several colors upon panning a very small sample. The coarser gold should mostly be found in the bottom of the arroyos with a very good concentration on the false bedrock. Anecdotal information suggest that several large nuggets up to approximately 60-90 grams were found in the cut banks of the alluvium.15

A number of estimates of the volume and grade of the placer deposits are listed in the files. The most recent of these 16 gives an estimate of 14,743,330 cu yd (21,668,088 st) with a gold content of .132 opt.

Copper Deposits: The copper deposits are described by Wilson17 “...lenticular masses of tetrahedrite in greenstone; dissemination of chalcopyrite and bornite in greenstone; and disseminated pyrite, chalcopyrite, and chalcocite in schist and along basic dikes.” The specific copper deposits on the property are described by Podesta18 as being mostly confined to the andesite dikes and occasionally in the adjacent zone of contact metamorphism. One exception he reports is in a narrow rhyolite dike in the eastern claims. The copper minerals are deposited in fracture planes and vienlets in a manner similar to that of a stock work deposit. A number of chip samples were taken and assayed and several holes were drilled partly delineating an ore body. The ore body is estimated to be 13,500 ft long, 400 ft wide, and 500 ft thick.(4115m x 122m x152m).

The actual limits of this ore body have not been defined. A combination of geochemical, geophysical and detail geological mapping will almost certainly

extend to probable parameters of the ore body. A series of core drill holes will be required to completely define the boundaries of the ore body. The holes need to be planned in conjunction with the geochemical and geophysical surveys in order to optimize the results.

Barite Deposits: A number of small barite veins have been identified, mapped and sampled on the property 19 . These veins are reported to be mine able with surface methods. The grade of the barite appears to run from drilling mud to pharmecutical grade. Little information is available on the marketing of barite at the present time.

MINERAL PROCESSING

Alluvial Gold: The recovery of the gold in these alluvial deposits is addressed in some considerable detail in the book provided by Gerald Blech. Essentially the principal equipment needed to treat the gravels would be a screening section, coarse gold gravity concentration, and very fine free gold recovery.

The screening section should consist of a grizzly of some sort, adequately sized for the duty. The oversize from the grizzly is returned to the pit. The undersize is fed to a trommel /stone washer with a good scrubber section to break up “chunks” of clay and caliche/fresh water limestone. A

surfactant and soda ash would normally be added to the wash water here in order to “wet” the very fine and/or very flat free gold to prevent it floating off. The oversize material would be returned to the pit for reclamation.

A rather typical scheme would then use mineral jigs to recovery the coarse free gold and a large portion of the heavy black sands. The tailings from the jigs would then pass over concentrate tables. Considerable progress in the design of concentrate tables has been made in the past few years. Some serious test work would determine which of the modern placer tables would serve the best. The tailings would be de-watered with the sand returned to the pit for reclamation. The sediment remaining in the water would be settled out of the tail water and the water recycled to the plant.

The concentrates from the jigs and tables would be cleaned on cleaner tables. The cleaned concentrates would be then separated on a magnetic belt to remove the magnetic fraction. The magnetic portion could be re-tabled to further remove very fine sized free gold. The magnetic concentrate would be separately stockpiled for possible future treatment. The gold concentrate can be directly smelted in a small melt furnace.

Water Well referenced in basic documents

Hardrock Gold: The recovery of the gold from the vein deposit mines would be a rather strait forward operation. The size of the plant required cannot be determined until there is sufficient exploration conducted on the vein deposits to determine the probable production rate, etc.

Considerable experience with small gold mills in Colorado and Arizona suggest that the mill will consist of an ore receiving and crushing section, fine ore storage, grinding section (probably 2 stage with a rod mill and a ball mill), gravity concentration with a jig in the grinding circuit, flotation and concentrate dewatering and treatment.

The likely cause of the end of the hard rock gold mining in the district was the depletion of the highly oxidized and enriched sections of the veins. This is a fairly consistent pattern through out Arizona, New Mexico, parts of Nevada, Utah and parts of Colorado. The reason for this is that the highly oxidized zones were “free milling”, that is a simple crushing- grinding and gravity concentration were the only things needed. With the sulfide ores recoveries dropped and the concentrate treatment became mostly a matter of shipping to a smelter.

The concentrates from the flotation mill can be reground and leached with cyanide with solutions being extracted with activated carbon. The carbon would then be stripped with a hot caustic cyanide solution and the gold and silver electro won on steel wool cathodes. Should the concentrates be refractory to this method it may be necessary to oxidize the pyrite either in an autoclave type reactor, or oxidation with an infusion of “iron” and “sulfur” eating bacteria (thiobacillusthio-oxins) and (ˆthiobacillusferro-oxins) prior to cyanidation.

Copper:

Considerable laboratory and pilot plant work will be required to determine the best treatment scheme for the recovery of the contained copper. It would seem probable that the lowest cost recovery of the copper minerals will be by means of heap leaching the ore with a dilute sulfuric acid solution. The leacheate would then flow through a series of mixer- settler units where the copper ion would be removed from the solution with a liquid ion exchange reagent, most likely in a kerosene or similar organic media. Following the extraction of the copper ion the barren solution would be recycled to the leach solution storage for reuse in leaching the pad. The LIX solvent would be stripped with a strong sulfuric acid (H2SO4) solution. This pregnant solution would then be passed through a series of electrowinning cells with the copper being plated out on starter cathodes. The resultant 99% copper would then be marketed.

In the event that the quantity of precious metals (gold and silver) are of such grade that they cannot simply be abandoned in the heap leach it will probably be necessary to use a conventional concentration scheme, that is crushing, grinding, gravity gold concentration, and flotation of the copper and remaining gold and silver minerals. In this event the gravity concentrates would be sent to the gold mill for final recovery of the gold. The copper concentrate would be marketed to such smelters as may be available. The

closest copper smelter is operated by ASARCO at Haden, Arizona perhaps 100 miles away.

Before any milling scheme can be considered bulk samples typical of the ore to be treated will be required. It is suggested that after detail drilling of the ore body is well along , a decline be driven to obtain bulk samples in the oxide zone and in the underlying sulfide zone.

None of the proposed concentration/treatment schemes proposed for this operation are of an experimental or speculative nature. All these are in widespread use through out the world.