Golden Phoenix plans attack at Borealis (February 25, 2003)

Golden Phoenix Minerals (GPXM-O) has tabled plans for a three-pronged exploration program at its Borealis gold project, near Hawthorne, Nevada.

Plans for this summer include a look at re-leaching old leach pads, which are reported to hold more than 10 million tons of previously leached gold ore. Drilling on the leach pads by a previous operator returned up to 0.105 oz. gold per ton over 5 ft. The company plans to begin the permitting process to allow for further drilling aimed at providing material for assaying and metallurgical test work. Pending positive results, permitting, design, and construction of a new leach pad would follow.

The next phase of the plan involves evaluating the property’s remaining oxide ores. Such material would be transported to the proposed new leach pad. Golden Phoenix has targeted the fringes of the old Borealis, East Ridge, and Northeast Ridge pits. Several previous holes returned mineralization between the Polaris and East Ridge pit.

Finally, Golden Phoenix intends to evaluate high-grade sulphide mineralization on the property. The best prospect is the Graben deposit, which makes up a large portion of Borealis’ resource. Drilling has already cut up to 25 ft. running 2.03 oz. Drilling beneath the Freedom Flats pit was highlighted by 50 ft. grading 0.828 oz. Other targets are found below the old Borealis pit and under the Northeast and East Ridge zones.

At last report, Borealis’ measured and indicated resources were 33.4 million tons averaging 0.044 oz. gold and 0.228 oz. silver per ton.

Borealis is situated in the prolific Walker Lane gold belt. Gold was discovered on the property in 1978 by Houston Oil & Minerals Co. Tenneco Resources and Echo Bay Minerals operated an open-pit, heap-leach mine and produced 635,000 oz. gold from 10.7 million tons between 1981 and 1991.

Gold mineralization is characterized by large areas of silicification, hydrothermal brecciation and advanced argillic alteration in Tertiary andesite flows, breccias and tuffs. Economic deposits are structurally controlled along a series of north-to-east-striking normal faults that dip steeply to the northwest, with gold occurring as sub-micron-size particles in highly altered andesite and tuff.

The Borealis property is divided into three mineralized zones — Borealis, Polaris and Orion. Each in turn comprises three separate targets, some of which have been mined. Several other target areas have yet to be explored.

In early 2002, citing some “underlying lease issues” that arose during its due diligence, Golden Phoenix nixed a letter of agreement to sell Borealis to Seabridge Resources (SEA-V). Seabridge had agreed to pay US$500,000 in cash, US$500,000 in two interest-free promissory notes, and issue the company 250,000 common shares.

Golden Phoenix had hoped to use the proceeds from the sale to help bring its Mineral Ridge mine in southwestern Nevada back into gold production.

At Mineral Ridge, also in Nevada, Golden Phoenix recently submitted the final revisions to its plan of operations and reclamation to the Bureau of Land Management and Nevada Department of Environmental Protection. Initially, Golden Phoenix is looking to extract gold from the former producer’s leach pad by adding cyanide to the leach solutions. Longer term the company aims to begin open pit and possibly underground mining of a mineable reserve pegged at about 2.66 million tons averaging 0.079 oz. of gold per ton.