Terra Project

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WestMountain Gold,  Inc. Terra Project
2015 Field Season Summary November 30, 2015

 

Summary

During the 2015 season, WestMountain Gold, Inc. (WMTN) reached milestones that were significant for the future advancement of the Terra Project and the success of the company. While WMTN did not raise capital in 2015, BOCO Investments exercised warrants and provided a loan to the company ; providing enough working capital to pay the lease fees and start the field season in June of 2015 and allowing the project to generate cash flow to fund project operations ending in October 2015. January through April were devoted to logistics for construction and underground development and evaluating the metallurgy to improve mill efficiency at the Terra Project. MSHA training and support logistics were completed during May and June. Project activity during the first 10 days of June focused on the opening of camp and repair and maintenance of equipment as well as repair and rebuild of worn out mill equipment. On June 10th, WMTN started processing the 2013/2014 ore stockpile through the mill and gold production commenced for the bulk mine sample. The months of June through October were focused on bulk sample mining and milling at the Terra Project. Milling of 2013/2014 ore stock pile continued through July. There was continued repair and rebuild of mill equipment. In mid-July bulk surface mining of the Ben vein began. No work was done in 2015 on the Fish vein. The Ben vein was surface mined in July, August and September with the last load hauled off the mountain on September 15. The months August through October were focused on processing ore mined in 2015 along with the installation of crushing equipment to increase crushing and grinding ore from 1 ton per hour to 3-5 tons per hour. The strategic operation activities for 2015 were:

1. The repair and rebuild of mill equipment.
2. The upgrade and maintenance of the 4 mile road network connecting the mill site to mine sites.
3. The mining and level benching of the Ben Vein.
4. Gold Production through doré produced at Terra.
5. 1700 tons of ore mined and hauled off mountain.
6. 927 tons of ore processed at mill.
7. Purchased and transported motor grader to complete C-130 airstrip construction.
8. Acquired mill equipment and constructed second line to increase mill capacity production to 3-5 tons per hour
9. Cash flow paid all operating costs

During 2015 there was approximately $1.2M of expenditure at the Terra Project.

Mill Operations

Prior to commencing mill operations, the repair and rebuild of worn out mill equipment required a week and a half of work during the first nine days of June. The mill began operation on June 10th but required additional repair and rebuild days in July, August and September, with no problem-free months of mill operation in 2015. The mill equipment provided by Lyntek is worn out and needed constant maintenance and repair. The mill had 124 operating days with 65 run days of trouble free operation in 2015. There were 59 days of maintenance and repair work this year during operations which represents 47% down time. This is unacceptable performance of mill equipment and improvements will be needed in 2016 for successful operation. Based on the number of down days and lost production, management projects there were 20 oz. gold per day loss due to mill down time, with a loss of 2000 oz. gold doré or approximately 1180 oz. gold bullion or approximately $1.3M in lost revenue. In addition to the lost revenue, cost of operations during mill down time was approximately $400,000.

In August of 2014, WMTN purchased a 5 ton per hour Jaw crusher and a 5 ton per hour grind mill to increase production and cash flow. The Jaw Crusher was installed in September 2014. The grind mill and a second crush circuit line construction started in June 2015 with the pouring of concrete pads for the hopper, conveyors, grind mill, and mill building extension to accommodate a double decker gold table. The welding and fabrication began in late July 2015 and the second line was commissioned for its first run of material on September 12, 2015. The bugs were being worked out of the new line through the close of operations.
There were approximately 15 yards of concrete poured for the mill equipment in 2015 which included a 24’x12’ addition was added to the mill building for tool and equipment storage and create room for the double decker gold table.

The pilot mill operation put WMTN and Terra in a cash-flow revenue position for 2015. Project operating expenses were paid through pilot gold mill production.

Mining

Mining commenced at the Ben Vein in early July of 2015. In June, road construction was the first task completed to open up more exposure of the vein. During road construction there were 5 loads or approximately 12.5 tons of ore hauled to the mill. The lower Ben Vein area from previous mining during 2013 and 2014 and the newly opened in 2015 upper Ben vein approximately 175’ vertically higher up the mountainside were mined during July, August and September. A very steep skid trail access road was initially constructed to access the upper Ben Vein in early July. Haul road constructed to the upper Ben Vein was completed in August. Ground control and safety fence installation on the high wall was completed as the first task prior to mining. The Ben Vein was then mined at two locations with the small Cat 303 Excavator, the Takeuchi 145 Excavator and a D7 Cat Dozer. A two-three man crew operated the mine site July through mid-September. The ore was hauled from the mine site in 2 crawler track dump trucks for the first month and then in August a third crawler dump truck was purchased and 3 crawler track dumps were used. There were 680 loads of ore hauled with the crawler dump trucks over 70 days from the mine site to the mill and stockpiled for processing. The Cat D-7 Bulldozer was used to bench down levels and remove overburden at the Ben Vein to facilitate mining the high grade vein with the small excavator. There were three bench levels mined in 2015 at both the upper and lower Ben Vein workings. The estimated total number of tons mined in 2015 was 1700 tons.

 

Mine Tunnel Entrance

There was no work done on mine portal construction in 2015. Funding did not permit any construction activity. All preparation work completed in 2013 remains with the site prepared, dug down as near to bedrock as was possible and a large lay down landing built. The preliminary construction setup is complete so the project can start construction of the tunnel underground next year in 2016.

Water Well

A new 100 gallon per minute well pump was installed in the water well drilled in 2013. The well is drilled to a depth of 148 feet, with the pump set at 128 feet or 60’ below static water/ drawn down water level. The well yields consistently 100+ gallons per minute with the new pump installed in 2014 and can supply enough water for mill operation of the ball mill line. The new grind mill line constructed in 2015, when run in conjunction with the ball mill line requires more water than the well will produce. Both circuits can be run simultaneously when the water well and holding pond are both used to for water supply. Additional water wells need to be drilled to provide adequate water for the pilot gold mill to operate when surface water is frozen.

 

Exploration

Surface exploration along the new road cuts at the south end of the Ben Vein zone was conducted with a systematic samplings of the road cut and Ben Vein Benches, collecting samples every 25 feet along road cuts and daily from vein benches to assess any alteration and gold mineralization present. A total of approxima100 samples were collected and awaiting analysis. Anomalous gold was identified in rock and vein samples in these areas with XRF analysis.

 

Drilling

No drilling occurred in 2015 at the Terra Project.

 

Production

During the 2015 Field Season the Gravity Circuit Gold Mill at Terra successfully processed approximately 927 tons of ore. The ore flow through rate averaged 0.75 to 1.25 ton per hour.

There were many down days required during the 2015 season for mill retrofit and repair. Some of the mill equipment and components purchased from Lyntek were, old worn out and needed replacement or rebuilding. Based on the mill run records there were 76 days with down time with a cumulative 59 down days at the mill or 47% of the operating days down. This had an adverse negative effect on production at Terra.
There was 927 tons of Ben Vein Processed through the Ball Mill and Stutenroth Mill. There were 267 tons of material form 2013/2014 processed and 660 tons of material from 2015 processed. There are approximately 1040 tons of ore currently stockpiled at the mill to be processed in 2016. No Porterfield- Courtney tailing were processed. From the Ben Vein material processed, it was determined the 2.65 ounces gold doré per ton yielding a net of 1.54 ounce per ton gold. The doré averaged approximately 58.13% gold but doré bars ranged from 24% to 71% gold dependent on the composition of the gold sand collected from the concentrator and gold table. The doré bars ranged from 20 to 250 ounces each dependent on mold size. The cleaner gold captured during separation yielded doré averaging 60-70% gold. The dirty gold sand captured yielded lower grade doré from 40% to 55% gold. The daily production records indicated that an average of 13.8 tons was processed per run days of the mill. There were 2461.786 ounces of gold doré produced with 1431 ounces of net gold bullion for the 2015 field season.

Metallurgical Testing

McClellan Laboratories of Reno, Nevada was contacted to evaluate and test the ore, concentrate and tailing from the Terra project so we could determine where the gold was in the different stages of processing and in what form the gold was in; free milling gold or chemically bound to other minerals. The ore, concentrate and tailings from the Ben Vein were sent to DCM Science Laboratories as directed by McClellan for detailed study. It was identified through this study that the majority of the gold is free milling and not chemically bound, however it was determined that a percentage of the gold was extremely small in size less than 50 micron and was floating off or not being liberated from the grains of crushed ore. Further work indicated that to capture the gold from the concentrates and tailing, an additional processing methodology was required. The methodologies and technologies available are being evaluated and under review. The review conducted has a closed circuit vat leach non cyanide system as an effective and environmentally responsible process. Floatation circuits and technology are also under review. This end processing will enable WMTN to recover greater than 90% of the gold present.

Test samples of concentrate of Ben Vein ore were sent to Ameri Chem in Arizona and Metallurgical Research Inc. in Idaho to provide two independent assessments for a closed system vat leach process to extract the gold and silver not captured in the pilot mill gravity circuit. There are 7 tons of concentrate palletized and ready to ship once we review metallurgical test results and

Tailings

The tailings were placed in the tailing ponds which lay behind the mill. A third much larger tailing pond construction was started in September next to the number 2 tailing pond which is nearing capacity. The number 1 tailing pond is full. The tailings were sampled periodically and contain gold averaging approximately .5 to 1 plus ounces per ton.

Gold Recovery

From the 927 tons of Ben Vein processed there were 1431 ounces of gold bullion and 473 ounce of silver bullion from the doré produced at Terra.
The doré was sent to Elemetal Refinery for smelting into bullion and subsequent gold sale. The sale of gold has funded the project and company operation in 2015. WMTN is hopeful for gold price recovery to maximize revenue from production in the future.