U.S. REPORT (March 09, 1992)

In order to get a better handle on deep mineralization below open pit reserves, Atlanta Gold (TSE) may rehabilitate some old underground workings at its 100% owned Atlanta Gold property in Elmore Cty., Idaho.

Drilling to date from surface has met with difficulty in intersecting the steep structure at depth.

Proposals are being sought from engineering firms to reopen existing workings to allow the company to drill test the two potential gold zones on the north and south sides of the Atlanta shear zone from underground. The work would include driving an 1,100-ft.-long crosscut into the hangingwall in order to set up drill stations.

An existing adit on the 900 level will be the focus of the study. The adit has been in use by a previous operator as late as 1963 although mining on the property dates back to the 1800s. Previous operators were working two narrow high-grade veins in the footwall and hangingwall of a shear structure. Atlanta plans to compare the cost of the rehabilitation with driving a new decline to the area.

To date the company has outlined two proven open pit reserves covering disseminated gold-silver mineralization around the shear structure. One contains an estimated 8.3 million tons grading 0.08 oz. gold and 0.24 oz. silver per ton while the other hosts 6.2 million tons grading 0.049 oz. gold and 0.088 oz. silver.

The mineralization is a combination of oxide and sulphide material and as a result, a portion of the reserve will require milling.

Newmont Mining had an option to earn a 51% interest in the property and it drilled the downdip extension of the high-grade veins below the open pit reserves in the summer of 1991. The drilling did return some high-grade, narrow intercepts, but Newmont decided to drop the property a short time later, noting that the program had failed to expand the resource as much as hoped.

Atlanta did some additional drilling last fall, reporting mixed results with a number of low-grade intersections as well as further high-grade intervals over narrow widths.

Atlanta has outlined two possible resources from the drilling results; one in the East Extension area containing 437,000 tons grading 0.33 oz. gold and the other, below the East pit, containing 357,000 tons grading 0.35 oz. gold. The reserve has not been diluted to mining width.

Drill results from the two areas are as follows:

East pit:

Hole Width (ft.) Gold (oz./ton)

87-271 4.7 0.23

87-272 4.6 1.80

87-276 8.7 0.39

87-277 1.0 1.58

88-386 2.2 0.83

91-400 0.7 0.60

1.0 0.51

0.3 0.66

91-405 3.0 0.11

East Extension:

91-396 4.5 0.24

91-407 4.0 0.77

91-408 11.0 0.32

20.0 0.22

91-410 less than 0.10

91-412 2.6 0.92

91-414 less than 0.10

91-415 less than 0.10

91-421 less than 0.10