Goldrich Completes Mine Construction and First Season of Gold Production at Chandalar
Spokane, WA - September 17, 2015 - Goldrich Mining Company (OTCBB: GRMC) (“Goldrich” or the “Company”) is pleased to report gold production commenced at the Little Squaw placer deposit (“Little Squaw”). The Company’s 50% owned subsidiary, Goldrich NyacAu Placer, LLC (“GNP”), completed its new mine and plant in late July, began production in early August, and continued production through September 12th. The plant will normally run from June to mid-September of each year.
“The beginning of mine production is a significant milestone for the Company,” stated Goldrich President and CEO William Schara. “This is a culmination of our strategy to generate non-dilutive funds from our placer assets and to advance our properties even in the midst of a market decline.”
The plant began shakedown procedures during the first week of August. Initial gold production of approximately 53 ounces of fine gold was on August 9th and average daily production rose to approximately 103 ounces of fine gold per day for the production season. The 2015 production season was 35 days but the normal production season is approximately 107 days, subject to weather. A total of approximately 4,400 ounces of alluvial gold, equivalent to approximately 3,600 ounces of gold, were produced. Production would have to increase to approximately 190 ounces of fine gold per day in order to produce 20,000 ounces of gold per season. The plant exceeded that level of production on six days and additional experience with the equipment and the mineralized deposit should improve the average.
Goldrich retains ownership of its 50% interest in GNP but, subject to the terms of the GNP operating agreement and after selling a portion of its cash distributions (see press release dated June 23, 2015), Goldrich will effectively receive approximately 44% of any cash distributions produced by GNP.
According to the GNP operating agreement, on at least an annual basis, GNP shall allocate and distribute all revenue (whether in cash or as gold) generated from GNP’s placer operation in the following order:
- Current year operating expenses,
- Members’ distribution of 20% (10% to Goldrich and 10% to NyacAU) provided that, for so long as the loan (LOC2) to GNP from NyacAU for the purchase of a royalty is not paid in full, GNP shall retain 100% of Goldrich’s distribution and apply against the loan,
- After payment of operating expenses and the member’s distribution of 20%, GNP will apply any remaining revenue to reduce the remaining balance of the loan from NyacAU to GNP for the development of the mine (LOC1),
- Reserves for future operating expenses and capital needs, not to exceed $3,000,000 in any year, and
- Member distributions of any remaining gold production on a 50:50 basis to each of GNP partners provided that, for so long as the loan LOC2 is not paid in full, GNP shall retain 100% of Goldrich’s distribution and apply against the loan.
To date Goldrich has completed approximately 15,000 feet of drilling at Little Squaw and outlined 10.5 million cubic yards of mineralized material at an average head grade of 0.025 ounces of gold per cubic yard for an estimated total of approximately 250,000 contained ounces. This mineralized material at Chandalar is not a mineral reserve as defined in SEC Industry Guide 7. Based on a targeted production rate of 20,000 ounces of gold per year and the mineralized material drilled out to date, the Little Squaw mine will have a mine life of approximately 12 years. Little Squaw is one of seven potential placer targets on the Chandalar property and is open to expansion.