Colorado Goldfields Inc. (OTCQB: CGFIA) (CGFIA.PK) -- In response to the rapidly changing economics for gold pricing (New York spot gold closed at $1,433.20 bid on March 1, 2011, as reported by Kitco Metals Inc.), and associated costs of production, Company management has reforecast the first year gross revenue for the Pride of the West Mill. Management now projects $14.3 million during the first 12 months of operation, which is an increase of $6.1 million.
In addition, the Company is pleased to provide an update of the 2011 work plan for the Brooklyn Mine. Colorado Goldfields entered into a lease with an option to purchase the property in September 2009. At that time, the historic resource was valued at $13.8 million based on a gold price of $950 per ounce. With the increase in gold price, the current value of just the historic resource is estimated to be $20.4 million, an increase of $6.6 million.
Colorado Goldfields' personnel have completed an extensive review of all available information concerning the exploration, past production, and the existing historic resource estimate (14,535 oz. gold at $1,400/oz., $20.4 million) of the project area, and have developed a specific and dynamic strategy for exploration.
The existing historic resource estimate for the Brooklyn Vein offers Colorado Goldfields a prime opportunity to develop a near-term minable reserve through confirmation and step-out diamond drilling. The expected resource blocks are located below the Number 2 Level of the mine and occur as down-dip extensions of known ore shoots. Most importantly, these ore shoots are open at depth and the continuity of mineralization is indicated by historic ore grade (0.10 to 2.13 ounces per ton of gold) drill intercepts over composite 4 foot mine widths.
In total, the Brooklyn property consists of approximately 600 acres of patented and unpatented mining claims centered on the Brooklyn Shear Zone. Surface reconnaissance of known mineralized areas, a geochemical soil survey, and a geophysical magnetic surveying are planned for late 2011 in order to assess the scale of any unrecognized mineralization.
"Aside from the obvious increase in value of the existing historic resource, this property is particularly exciting because it has been the site of several 'specimen grade' gold discoveries," stated Stephen Guyer, CFO for Colorado Goldfields. "We are targeting grades of 0.30 to 0.90 ounces per ton of gold, however the Brooklyn Vein has produced ore with grades as high as 30.0 ounces of gold per ton," stated Jonathan Moore, Project Geologist. "The Brooklyn represents a property that is perfectly aligned with our Company's strategy of targeting past producing mining properties in historic districts for exploration and production," said Moore.
The Company also holds a lease on the King Solomon Mine, which is located on the southern flank of King Solomon Mountain, just a few hundred yards up the mountain from the first discovery of gold in the San Juan Mountains in Little Giant Basin. Opened in 1876, the mine was in production until 1883. Historic assay results showed gold content of 0.75 - 0.9 ounces per ton.
"The King Solomon Mine is of particular interest to Colorado Goldfields because of its strategic placement in Little Giant Basin. Although no activity has occurred on the property since 1883, nearby properties in Little Giant Basin have produced significant gold," stated John Ferguson, director of Operations.
Management also restates the gross dollar value of the gold produced from the Pride of the West Mill. At 0.35 ounces of gold per ton, and a price of $1,400 per troy ounce, that represents approximately $500 million in gross value, and at 0.8 ounces per ton, gross value of the gold would be in excess of $1 billion; not to mention the cost benefits of backfilling and potential reprocessing.
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About Colorado Goldfields Inc.
Colorado Goldfields Inc. (OTCQB: CGFIA) (https://www.cologold.com) is a Denver-based junior exploration and mining company primarily exploring for gold and silver. Our seasoned management team targets historic gold camps with strong potential for multiple deposit discoveries. Currently, our business model in Colorado provides an outstanding combination of former producing properties with excellent exploration and production potential and a currently inactive, modern, up to 700 ton per day capacity mill facility to allow for an attractive short-term production time frame. We expect that this strategic plan will allow Colorado Goldfields to reach its goal of profitability, potentially within the next 18 months.
The Company has made available a current CGFIA Fact Sheet in PDF format at https://www.cologold.com/uploads/CGFIFactSheet.pdf.