The project will be conducted in two main phases: a pilot phase and a production phase.


Pilot Phase

This plant with the planned equipment expansion will allow for the processing of one to two tons of ore a day. The required investment to expand the existing facility for the pilot operations is estimated at $7MM. The funds will be used for the ore acquisition, the processing of the ore into a concentrate which involves grinding, tabling, and magnetic separation, and finally the extraction of the precious metals via the proprietary processes of the technology consultants. A separate laboratory will be set up to ensure quality control during the pilot phase and the subsequent production phase. During the pilot phase we will evaluate the success of the pilot plant, refine the process, implement the refined process, and to obtain the two permits required for the mining operations: the Notice of Disturbance and the Mining Permit. The Pilot phase will take approximately 4-6 months to completion.


Production Phase

The full production cycle will be achieved in stages. The first milestone will be achieved at 9-10 months with the initial production coming online. The process that proved out in the pilot operation will have been implemented and the precious metals will be extracted. The full production in the first stage beginning at approximately the 12th month will be 100,000 tons per month of head ore that will be processed into a production concentrate. The ore will be concentrated on site by a ratio of at least 10:1 before transporting it to a nearby off-site location for further concentrating and processing. The follow up milestones are at 18 and 24 months with production increases to 300,000 and 450,000 tons per month, respectively.

The initial production phase revenue beginning at approximately the 13th month will be $1.4K per day growing to $6.6MM per day in full production after approximately the 24th month for a yearly revenue stream of $1.6B yielding an expected yearly profit of at least $286MM (pro forma financials for underlying assumed recovery rates and metals prices available on request).

THE MINING COMPANY requests a funding budget of $100MM with a draw schedule over the first eight months of the project. There are two exit options for investors, equity participation and/or repayment of a loan with interest over a period of time. All details are negotiable.

A preliminary analysis of the target ore body, existing and currently tested technology, market conditions, and comparative analysis with other (including historical) mines leads to the following proposed three-phase strategic approach:

Phase I	Pilot Mill and Ramp up to Full Production
Time	Month 0 to 9
Key Goals	Pilot plant to complete final engineering work for production facilities
	Laboratory to establish full control over concentration process and final recovery Complete permitting processes Notice of Disturbance Mining Permits Commence operations as a metals producer Expand and define available ore reserves
Key Activities	Development of the permitting paperwork and work with BLM and local authorities
	Definition drilling to develop NI 43-101 compliant resource estimate Complete engineering designs and process control setup Secure mining claims on areas of interest (State and Federal land, privately held claims) Secure plant site for sustainable large scale processing Design and setup of a pilot plant for up to 10 tpd of concentrate production Develop IT support functions Purchase equipment Relocate Saguaro cacti Engage mining company to engineer and install mining operations and ore processing plant in modular manner End-to-end execution of designed process for technology validation
Key Expenses	Permitting Process
	Laboratory Setup Labor (internal, external for engineering plans, etc) Pilot plant capital expenses and operational costs Production facilities equipment and setup Expansion of available ore reserves
Exits	Minor income through the pilot plant

Phase II	Expansion Phase
Time	Month 6 to 24
Key Goals	Complete transition from pilot mill to initial stage to 50,000 t per month to 225,000 t per month operations Stabilize mine and plant production targets Re-payment of loans and startup expenses
Key Activity	Execute work force expansion Establish high mine safety record Work with communities to communicate the value of the mine
Key Expenses	Operational costs (labor, chemicals, etc) Capital and Other Expenses
Exits	Sales of products (anode mud, refined)

Phase III	Consolidation Phase
Time	Month 24 to 60
Key Goals	Maintain consistent operations Grow company treasury for future expansion
Key Activity	Improve work force development (education, retention, etc) Maintain high mine safety record Work with communities to communicate the value of the mine
Key Expenses	Operational costs (labor, chemicals, etc) Capital and Other Expenses
Exits	Sales of products (anode mud, refined)

Operations

The operations will be executed in two overlapping lines of work. First, a pilot plant with associated laboratory will be established. It will function to complete the engineering of the production facility. This process is planned to be completed in month 4. Partially in parallel, the production facilities will be established and the mine site will be prepared. A 9-10 months timeframe is estimated to complete the production facilities. There are two components of the operations, the mining and the processing of the ore, which will be physically separated for several reasons (easier permitting, better security, and flexible ore sourcing). The offset to this are higher transportation costs which will not overcome the benefits of the separation, in particular because the head ore will already be partially concentrated 10:1 at the mine site.


Mining Operations

The surface preparations will require the relocation of Saguaro cacti, for which certified contractors are available. The surface must be prepared to reduce the dust emission from the mine site. A contractor will be deployed to spray the area with their patented solution minimizing dust development from open dessert land. The mining operations will be conducted as a standard sand, gravel, and magnetite operation. The area will be divided into blocks and a schedule will be drawn to remove the ore from each of the sections in sequence. These operations will initially be prepared by THE MINING COMPANY and later be executed by a contractor. The ore recovery will be conducted with front loading equipment and possibly wheel excavators in the future (450k tons per month level). No blasting will be required. The material is granular and adhesive but easily separated.

Historically, open pit wall inclinations have sustained for many years between 60-75 degrees. All recovered ore will be screened, crushed, tabled, and concentrated on site at a ratio of 10:1 or better. The concentrate will be transported to the processing facility. The byproducts will be either used for reclamation work or sold to cement manufacturers.

Two tiers of permits are required to go into mining production. The first tier, the Notice of Disturbance, will allow the deployment of mechanized equipment onto the claims to assess the ore body through drilling and deep sampling. A bond will be required in the approximate amount of $12,000. A certain amount of ore can be removed from the site, yet no commercial sales will be permitted at this point. The permitting step will take about one to three months.

A second set of permits is required to move the project into actual mining. To obtain those permits, a professional mining plan and environmental impact study have to be presented. These permits will require additional bonds, likely in the range of $300,000+. This process could be completed within four to eight months.

Mining attorneys will be consulted to ensure all federal, state, and county requirements are going to be met. We do not foresee any major difficulties in obtaining either of these permits. There are no endangered species protected in the area. Grazing is the only competing land use in the valley. The County's economy can use the created jobs. We will also commence a definition drilling program to bring the ore reserves to NI 43-101 compliance. The ore body has been drilled historically (44,500 ft) for its magnetite contents as a prelude to potential iron ore operations. The engineering report from that time is available but will require updating for the precious metals contents and modern drill methods, i.e., double wall drilling to prevent contamination of the sampling with material fallen from the drill hole walls. There are several contractors available for deployment, due to Arizona's well established copper industry. A full review of the conducted drilling operations will be provided upon request.


Processing Operations

The processing operations will be executed on a plot in the closest city, which has several large plots available for heavy industrial use. We will be contracting with another company for the implementation of their processing methodologies. This other company has several operational facilities one being already in Arizona. They have been working with the ore over the last 4-5 years and have developed both a concentration process and an extraction process that suits the conditions. THE MINING COMPANY will be staffing the extraction process team and heading the quality control system through a fully equipped laboratory. THE MINING COMPANY will also provide project management and marketing. Once the processes are in place and run sufficiently efficient, the daily operations are likely to be turned over to a contractor, which has not yet been determined.


Each claim encompasses an area of 160ac. The claims are virgin dessert land and no ongoing disturbances occur. The claims have been valued by an independent geologist.

The claims are located atop a major magnetite bearing alluvial flat ("black sands"). The material is well rounded and granular between 1/16 mm and 2.5 cm. It is loose and can easily be separated into fractions by simple physical means. Geological assessments have found the sediment to be remarkably uniform in composition in horizontal as well as vertical extent. Extensive matrix core drilling in this area and on the claims themselves have not reached bedrock, indicating a minimum depth of the sediment of at least 1000 feet throughout the valley; up to 3000 ft are assumed. While there are bedrock protrusions within the valley none are on the claimed properties.

The area is located in an arid desert environment. The topography consists of an alluvial plain sloping gently westward at a rate of about 50 feet per mile. Drainage, above and underground, follows the surface slope westward. Washes crossing the claims are usually dry except for the two rainy seasons when occasional water flow can be observed. The area has no surface water, yet drill tests have found aquifers between 40 and 440 feet with pump tests yielding 500 gallons per minute.


Mineralization

The main mineralization of interest is in the form of a magnetic black ferric oxide known as Magnetite (Fe3O4). It has a specific gravity of about 5.18 g/cc and has been shown to be present in quantities of from 3 to 20 percent by weight of the alluvium. This alluvium is a sand and gravel bed of surprisingly uniform consistency to depths of up to 3,000 feet. Over 45 square miles has been explored, with hundreds of samplings, both surface and subsurface, with an average concentration of about 5%. Ilmenite (FeTiO3) is a black titanium bearing form of magnetite and may be slightly magnetic. It has a specific gravity of about 4.7 g/cc and is present at about 2.5% of the magnetite by weight. Both of these relatively heavy minerals together are known as "black sands," and were discovered by assays in the early 1990's to carry substantial amounts of precious metals (PM)3, either associated with or integral to the black sands (BS). The specific gravity of each of these minerals is high.

Precious metals discovered so far include

Gold (Au),
Silver (Ag),
Platinum (Pt),
Palladium (Pd),
Rhodium (Rh),
and in two samples Iridium (Ir).

Assays

The assays conducted on the ore body are summarized and are available upon request.


Resource Estimates

The Black Sands have been explored extensively. THE MINING COMPANY owns a total in-ground value of close to $36.5 Billion to a depth of 100ft and $180B to a depth of 500ft. A more recent and more detailed valuation report was obtained by THE MINING COMPANY in August 2008 which is also included in the appendices.

Significant progress in the assaying and recovery methodology, has led to a recent breakthrough. The most current assays reflect an improvement in recoverable metals by one order of magnitude over the earlier assays.


Technology

THE MINING COMPANY has developed a unique methodology to address the lithological challenges posed by the target, a sediment ore with precious metals mineralization. Most, if not all of the precious metals are nano-sized pure metal (not alloys), protected from immediate access by an encapsulant, in this case carbon. Thus, standard fire assay techniques recover only a small fraction of the precious metal content. The carbon shroud prevents the lixiviant to reach the metals.

Through experimentation, we have discovered that the encapsulant can be quickly, completely, and inexpensively removed with a pretreatment of a combination of finely grinding, heat application, and use of chemical oxidation methods. Following the pretreatment, the metals can be conveniently leached by a variety of lixiviants, depending on the element. As the methods for pretreatment improved, the amount recovered has improved from hundredths of an ounce per ton to several ounces per ton of nearly all of the precious metals in the ore.

We expect further improvements with currently pending assays. The next step will be the transition of the technology to production-scale conditions. One approach will emphasize only recovery of the gold and silver metals and minimize attention to the platinate metals. The approach used here is less expensive to establish and operate, but limits the profit to only the recovery of the gold. This process, as currently conceived is shown schematically in the figure


Engineering Efforts.

It basically involves concentration of the ore on-site to about 20:1 by screening, magnetic separation of the magnetite fraction in the ore, where most of the gold is found. The balance of the ore would be discarded, at present. The concentrate would be trucked to an off-site production plant nearby that will perform the other unit operations needed to recover the gold and silver by leaching followed by electrolytic recovery. Recent assays using this methodology indicate that gold recovery should be in the region of 1 to 1.5 oz/ton of concentrate.

The second approach would incorporate the methodologies being developed for the ore by another company, which is currently developing a method to economically recover about 98% of the available metals using some newer physical and chemical treatments of the ore. All of the ore would be used, with the exception of the easily separated clays and alluvial rock containing no precious metal values. The pilot mill is currently being upgraded for this methodology. The method is highly proprietary, but uses moderately elevated temperatures, leaching, and electrical-based recovery, with additional chemical unit operations. It is more expensive, but improves recovery to values of $50,000-$60,000 per ton of the ore with an expense index of about 15%.


Permitting

THE MINING COMPANY proposes to commence mining operations in the alluvial black sands. The available claims are staked. Mining claims give the owner the right to mine as long as there is no adverse impact to the natural or urban environment. The permitting process establishes the latter. The first permit that is required is the Notice of Disturbance (NOD) which requires a $12K bond. Under the NOD, up to five acres can be disturbed in the designated mining zone and up to 1000t of material can be removed from the site(s). Machinery can be used in the process for drilling, trenching, etc. The purpose of the NOD is to allow prospective mine operators to establish the presence of a viable ore body. No sales of the removed material are permitted. The NOD may require between three weeks and two months to be issued.

The mining requires a mining plan, an environmental impact study, a reclamation plan, etc. The bond requirements are based on these plans. The bond is estimated to be in the $360K range for the proposed operations. The plans will be reviewed by several departments to ensure compliance with all regulations. The permitting process is expected to take between four and eight month.

THE MINING COMPANY is prepared to take the steps necessary to complete the requirements, hiring the appropriate legal counsel and to develop the requested plans with external consultants. The prime areas of concern are water, soil, fauna and flora, nuisances such as dust and noise. The water table has been established in its depth and qualities by several drilling undertakings. The local water shed development plan has been obtained and reviewed. The mining operations will only entail physical means of processing and concentrating the ore. No chemical processing will be conducted at the mine site, essentially making the mine a sand and gravel operation. No blasting will be required due to the granular nature of the ore.

There are currently no listed protected species in the vicinity. The landmark Saguaro cacti of Arizona are present and will need to be relocated by licensed professionals. These expenses have been budgeted. Dust pollution is budgeted for a contractor to spray in open areas. Noise pollution is minimal as there are no settlements in the vicinity.


Bonding

One of the first tasks in this project is to develop jointly with contractors the final engineering design. The planned pilot plant will be used as the ultimate tool to develop and field test that final design for the production facility.

Only in the 1990's did the precious metals mineralization become known. Since then, exploration of the ore body has focused on the challenges posed by the very small size and the location of the precious metals within the carrier mineralization. THE MINING COMPANY has conducted some preliminary work on the engineering design, which will drive the initial setup of the pilot plant.


Risks

Administratively, the approval process for mining operations must pass final approvals by state or federal agencies. Agency or public interest groups may cause either delays or restrictions on various aspects of the operation. None are anticipated. Agencies will review the impact of the mining operations on endangered plant and wild-life species. Environmental impact studies must be submitted along with the operations plans that will address this issue. The mining company will need to comply with all existing forms of EPA and state requirements, especially concerning ground water contamination and dust prevention policies.

Precious metals are a safe haven against inflation with many countries in the world currently buying up large quantities of gold, silver, and other precious metals for currency backing and catalytic and electronic purposes. Production costs are estimated to be low enough to sustain a severe decline in prices without having to suspend operations.

The United States in general and Arizona in particular, offer an equitable environment for mining operations, allowing for large scale investments without fear of adverse government interference.

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