The Utah Clipper Property consists of 229 mineral claims, totaling approximately 4,545 acres, directly adjacent to Placer Dome's Pipeline-Gold Acres gold mine complex, in the Cortez-Pipeline sector of the Battle Mountain Trend, Nevada.
Subject to third party net smelter royalties, the Utah Clipper Property is 100% owned by Columbus and has been optioned to Agnico Eagle (USA) Limited, a US subsidiary of Agnico Eagle Mines Limited. Agnico can earn a 51% interest in a package of three of Columbus Gold's properties, which includes the Utah Clipper Property, by incurring work expenditures totaling US$6.5 million over a seven year period. Once Agnico has earned a 51% interest, it may elect to earn an additional 19% (for a total interest of 70%) by preparing and delivering to Columbus, a feasibility study for the development of a mine on any one of the three properties. In the event of a decision to develop a mine, Columbus may require Agnico to arrange financing for Columbus Gold's proportionate share of the capital required for the development of the mine in which case Agnico will earn a further 5% interest in the three properties for a total interest of 75%.
Past production plus reserves at Pipeline-Gold Acres exceeds 25 million ounces gold. Recent announcements by Placer Dome indicate a further 10 million ounces gold at the Cortez Hills and Pediment deposits discovered in 2003.
Historic production at Utah Clipper includes silver and base metals from the Boss Mine and silver production from the Utah Camp and Clipper mines; past work includes limited modern exploration by Newmont, Goldfields, Noranda/Hemlo and Uranerz/Cameco in the late-1980's to mid-1990's.
The geologic setting at Utah Clipper consists of an undetermined thickness (800 to +2,000 feet) of siliceous sediments above the regional Roberts Mountain thrust fault and "lower plate" carbonate units hosting the world-class Carlin style gold deposits of the district.
The principal geologic target at Utah Clipper, classical Carlin or Pipeline style bulk-mineable, disseminated gold deposits or high grade, structurally-controlled vein deposits in "lower plate" carbonates, has not been adequately tested by past work.
Indirect evidence for the conceptual target includes:
a. Location directly on prolific northwest trend of world-class deposits in the Cortez-Pipeline area and immediately adjacent to the Pipeline-Gold Acres mine complex.
b. Historic drilling on the east side of the Utah Clipper Property at the Boss Mine and the Orbit claims intersected favorable lower plate carbonate rocks at depths of 800--1,200 feet with anomalous gold, silver, and path-finder elements. Deep drilling on the western 4/5 of the property is limited, with only one hole (Uranerz UUT-3) deep enough to intersect the lower plate at 2,200 feet of depth.
c. Base metal and silver mineralization at the Utah Camp, Clipper and Boss mines associated with controlling north-northwest structures.
d. Magnetic anomaly near east margin of the property indicates aureole of the mineralized Gold Acres stock with which the Gold Acres mine is associated. A second, similar anomaly is centered on Utah Camp to northwest and remains untested.
The Utah Clipper Program
Agnico Eagle's initial work program will focus on re-interpretation of historic exploration data and supplemental surface sampling and geophysical surveys followed by drilling. The planned program anticipates approximately 8,500 feet of drilling in four or five holes to test lower-plate gold targets at Utah Clipper.
