Informational Packet
Prepared Exclusively for
Ray Warner
J.S. Redpath Corporation
1410 Greg Street, Suite 404
Sparks, Nevada 89431
Kendall Scott
INTRODUCTION
This document was prepared exclusively as an introduction to the Swallow Mine,
Wickenburg, Arizona in contemplation of a potential contract mining agreement between
Kendall Scott Holdings, Inc. and J.S. Redpath Corporation. It provides general
introductory information only and its use for any purpose other than in conjunction with
discussions between Kendall Scott and Redpath is specifically prohibited.
STRATEGIC APPROACH
Kendall Scott proposes a staged approach to development and exploitation of the
Swallow Mines assets. Initially, it will commence crushing and concentration of an
estimated 30,000 tons of existing standing ore piles. Simultaneously, it will undertake
the steps necessary to reactivate mine operations both in existing shafts and tunnels
and newly advanced excavations or bores. Plant operations are planned for siting on
the near by See Saw Mine in order to confine all processing to patented acreage as
opposed to operation on BLM claims. Kendall Scott proposes to proceed with the
crushing and concentration of existing ores independently, while contracting renewed
mining development and operation to Redpath.
SWALLOW MINE OVERVIEW
The Swallow Mine is located in T8N R2W, approximately 14 miles east of Wickenburg,
Arizona in the Castle Creek Mining District, Bradshaw Mountain Range. Access from
Wickenburg is via Constellation Road, to Buckhorn Road. The adjacent See Saw
Mine lacks the level of exploration and development of the Swallow, however, it plays
an immediate role as the planned site for plant facilities to process Swallow Ores with
the expectation of completing exploration and commencing operations at both mines.
HISTORY
The Castle Creek Mining District has enjoyed mining activities since the
1860's, when it was first explored and developed. There are over 30
historic mines in the region with extensive production histories; principally
of copper and gold. Historically, the region has experienced three major
production periods:
1.From 1870 thru 1893, major mineral deposits were located and initial
production started. The depression of 1893 shut down most of the
area mines until the 1910s.
2.From the 1910s to 1930, 18 mines were brought back into production, but
most were shut down during the "Great Depression".
3.From 1970's to the present, exploration and development has
proceeded throughout the region with several mines under permitting
with the State of Arizona and the BLM.
Gideon Roberts, a prospector from Trinidad, Colorado, around 1890, initially
located the Swallow and named it after Colorado’s then State Treasurer, George
Swallow. State of Arizona records (Arizona Geological Survey Department of
Mining and Mineral Resources AZGSDMMR) provide the following early
description:
This mine has heavy cropping and is a ledge of porphyry ore
rich in free gold. The deeper we went down on the ledge the
more leached the ore became and carrying lower values in
gold though the ledge became wider and the filling softer,
composed of a combination of iron and porphyry with a strong
showing of copper.
The mine appears to have been shut down from 1929 to 1937 with only minor
working of the high grade copper zones. In 1937 it was re-opened and operated
until late 1939. It was reported that the Swallow Mine operations produced
3,800,000 pounds of copper and 2,640 ounces of gold from 8,300 tons of ore. The
average grade of gold was 0.31 ounces per ton (oz/t) with 22% copper.
During the early to mid 1970s Cypress Mining conducted surface mapping and
sampling only to eventually determine that the property was not sufficiently large for
the scale of operation they required. Starting in 1990, Phelps Dodge undertook
drilling and investigation at the Swallow only to likewise conclude that the scale did
not meet their needs. Portions of the Cypress and Phelps Dodge investigations are
available upon request to Kendall Scott.
MINE SUMMARY
The Swallow is comprised of approximately 560 acres of BLM Lode Claims and 13.69
Patented acres (formerly known as the Washington and reported at 14.67 acres) with the
patented parcel located internal to the BLM Claims. A complete listing of the BLM claims
including Serial Number., Claim Name and Number is available upon request.
An operational, small scale Pilot Mill and miscellaneous mining equipment is currently
located on the Mine. The property includes two 20’ width rights-of-way and 2 wells with
72.59 acre feet of water rights. A small spring/seep fed oasis is also on the property.
There are currently standing ore piles estimated at 30,000 tons. Analysis by FL Smidth
shows strong gold and copper stockpile values.
Summaries of laboratory results are set forth below in the Laboratory & Assay Summary
section. Detailed reports are available upon request.
GEOLOGY
The Swallow geology is characterized by a series of northwest-trending veins dipping 60-80 degrees to
the northeast. Veins on the east side dip steeply to the southwest. The veins are hosted by
Precambrian Yavapai Schist and Bradshaw Granite. The veins and mineralization are of probable
Tertiary age and likely related to extensional tectonism. Veins are concentrated along shear zones that
may be up to 100 feet in width locally. Veins are characterized by massive specular hematite seams
and stockwork zones with variable chrysocolla and malachite. Gold values range from below the
detection limit to as high as 1.1 ounces per ton. Approximately 50% of the samples yield gold values
above 0.5 ppm. The gold values seem to be concentrated in veins with massive specularite and
chrysocolla. (Report of R.O. White, January 1991, available upon request.)
MAPPING AND SAMPLING
As a result of its rich history, extensive mapping of the Swallow Mine is available for review and
study as well as for the initiation of additional exploration and development. The Figures
included hereinafter are intended only as representative of the level of information that is
available upon request.
An August 2013 report (available upon request) by Brian A. Beck, PG, CRS, reported the majority of
the Swallow area exposed rocks to be Yavapai Schist, which has been metamorphosed
into transitional phases from Green Schist to Anatexis Granite/Gneisses. The
current block configurations were reported to include:
1. Green Schist - The remaining green schist materials have well preserved
textures of the original sediment: quartzites, shales (iron and organic rich),
dolomites (very rare), limestones (very rare), rhyodacite ashs and flows,
rhyolite flows, and possible basalt flows.
2. Amphibole Schist - The amphibole schists generally grade into gneisses.
Amphibole schists occur from very fined grained and laminated to coarse
textures with grains over 1 centimeter (cm).
3. Gneisses and Anatexis Granites - The majority of the exposed rock in the
Swallow area has been described as a Granite Gneiss. The rock, when
viewed on edge, has a fair to very strong metamorphic fabric. When viewed
at any other angle, the rock is generally euhedral porphyric texture with
mainly quartz and orthoclase with minor mafics. The mafic minerals are
mainly: amphibole and a hydrated biotite. Muscovite is not common in the
Granite Gneisses.
SWALLOW MINE
INTERNAL
CIRCULATION ROADS
LABORATORY ANALYSIS AND ASSAY SUMMARIES
Despite an abundance of testing and analysis by others, upon acquisition of the
Swallow Mine, Kendall Scott commissioned a battery of additional sampling with
testing by FL Smidth of Salt Lake City. In very brief summary, the Smidth assay
and lab work demonstrated significant, recoverable quantities of both gold and
copper. Considering only the gold and copper values in the standing Swallow ore
piles and using spot prices (currently under market) of $1,000 oz gold (Spot
04/01/2016: $1,224.30/oz) and $2.20 lb copper (Spot 04/01/2016: $2.21/lb) the
available and ready to process ores at the Swallow Mine can, with a high level of
certainty, be projected to have a value in excess of $9,000,000.00 in gross revenue.
Results of 10 blended samples as reported by Smith are shown on the Table below:
Individual samples were blended and crushed to generate a composite of 100% -6 mesh
for BWi. The remainder of the individual samples was crushed again until 100% passing
-10 mesh and then sampled for elemental analysis by ICP. The samples were then
blended to generate a composite sample for flotation testing.
Representatives of FL Smidth conducted on-site sample collection at the locations shown
in the below reproduced “10 Assay Area” Map:
Additional information, including the final reports from FL Smith will be made available as
requested and necessary for further information and discussions between J.S. Redpath and
Kendall Scott.
CONCEPTUAL DEVELOPMENT STRATEGY
Kendall Scott is preliminarily proposing a staged development of the Swallow Mine assets in
conjunction with development of the adjacent See Saw Mine. Like the Swallow, the See Saw
Mine has existing, standing ore piles ready for crushing. In addition to See Saw’s ready to
process ore piles and untapped lode mining potential, See Saw’s 283 patented acres provide an
ideal site for location of Kendall Scott’s proposed plant facilities for processing of both Swallow
and See Saw ores.
Crushing of existing ore piles and sale of concentrates is projected to commence within the
second quarter of 2016. Simultaneously, exploration and development will proceed initially at the
Swallow Mine with the See Saw Mine as a secondary objective.
Current operations at the Swallow are being conducted pursuant to surface and
underground exploration permits. It is anticipated that an exploratory drilling program will be
implemented in two stages. Stage One will involve underground drilling to identify ore ahead of
existing tunnel workings. This will allow continued mining along current mine tunnel works
reducing the time line and allowing costs to be funded from ore pile revenues.
Stage Two will consist of surface exploratory drilling to identify additional ore reserves. The requisite
permitting for Stage Two will be done concurrently with Stage One. As these efforts proceed,
Kendall Scott’s Director of Mine Operations will continue the preparation of a final Plan of Operations
and proceed with permitting for full production.
A preliminarily conceived Drill Program is illustrated on the Figure below:
PHOTOGRAPHS
SWALLOW MINE CHRYSOCOLLA THE OASIS AT SWALLOW MINE
VIEW FROM THE SWALLOW MINE
MOONLIGHT MINE TUNNEL AT SWALLOW MINE EXISTING ADIT ON PATENTED ACREAGE
WORKING VEIN ON PATENTED ACREAGE KENDALL SCOTT CHAIRWOMAN PAULA TAYLOR
MOORE ATOP A PORTION OF THE 30,000 TONS OF
EXISTING ORE PILES ON PATENTED ACREAGE
Kendall Scott