The Oatman mining district lies on the western flank of the Black Mountains of northwestern Arizona, a fault-bounded range situated near the eastern edge of the Basin and Range Province. The Black Mountains are composed of a sequence of rhyolitic to basaltic Tertiary volcanic rocks which rest unconformably on Proterozoic-age metamorphic basement rocks. The volcanic sequence is late Oligocene to early Miocene in age (30-15 Ma) and is related to regional extensional tectonism.

Closely-spaced northwest- to north-northwest trending normal faults of moderate displacement cut the volcanic sequence and host the important gold-bearing epithermal veins of the district. The mineralized veins generally have a quartz calcite-adularia-gold (electrum) mineralogy. Two of the important vein-hosting structures, the Gold Road vein system and the Tom Reed-United Eastern vein system, have accounted for about 90% of the total gold production in the Oatman mining district. At least twenty additional structures have been mapped in the area. They remain poorly explored but highly prospective.

The mineralization at the Gold Road Mine consists of quartz-calcite-adularia veins within the northwest-trending Gold Road fault zone. The fault zone can be over 150 feet (46 m) wide and quartz vein(s) may occupy one or more strands within the structure. Vein strands usually occupy the footwall, hanging wall or a central portion of the structure, but strands may occur in two or all three of these positions within the same area. Where the fault zone is narrow (such as areas within the Gold Road latite) vein material may occupy the entire structure.

The “main” Gold Road vein occupies a strong fault fissure, typical of the district. This structure was formed by several separate movements before, during and after gold mineralization. The strike of the sinuous vein varies from N50°W to N66°W and generally dips 65° to 85° to the northeast, though locally the vein can be vertical or dip steeply to the southwest. The vein system outcrops continuously for about 7500 feet (2286 m) on the Property, including a segment that is in ore grade mineralization on the surface for over a mile (1524 m). Most of the ore has been mined in wide lenses within dilatant zones of the vein structure. The wider dilatant zones of the vein may be related to areas of north- to northeast-curving concavity along the sinuous normal fault.

2010-2015 period operation utilized traditional shrinkage and long hole stoping. The shrinkage stopes were efficient but the long hole stoping generated excessive dilution. The decline was extended down dip to expose projected ore. This ore below the Sharpe stope was accessed but not mined. Once again in early 2015 the mine was placed on “Care and Maintenance” due to lower gold prices.

Tests confirmed that the Gold Road ore responded well to leaching of the gold by a dilute sodium cyanide solution and recovery by activated carbon while the waste rock and tailings were found to be very neutral to basic in nature due to the large amount of calcite found in the ore.

Through these tests it was determined that the valuable mineral was electrum in a near 50:50 ratio of gold to silver. Some coarse gold was seldom found. General design criteria used to design the mill included a nominal p80 grind of 325 mesh, 24 hour cyanide leach, eight (8) hour agitated carbon in pulp and subsequent carbon stripping, electrowinning and smelting of the recovered gold and silver to dore bars. Cyanide consumption during operation has been approximately 0.5 lbs NaCN per ton ore.

The continuity of the vein system and mineralogical type, which is further supported by geochemical results from multiple sampling locations indicate that the reserves to be mined and processed by the existing plant should be very similar, if not virtually identical to, the ore previously processed at the plant. The find grind and subsequent cyanidation / CIP process which has demonstrated itself as being a robust process, in this mineralization, should be expected to perform as well as it had previously when working on the same ore. It should be noted that some of the higher grade ores were shown to contain copper sulfides and carbonates, these potentially leading to higher cyanide consumption when encountered; however, such higher grade occurrences are not anticipated in the current reserve base.