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• <br />' Bad Boys of Cripple Creek Mining Company, Inc., Property Evaluation Page 11 <br />unreasonable? ,recognizing that the material would require testing and appraisal <br />before an actual market price could be determined. <br />An appraisal was subsequently completed by Gary Werner of Albuquerque, a <br />recognized expert, and his opinion flee value of the average mine-run material is <br />$160 per pound. Certain high quality stones from this mine could exceed $400 per <br />pound. Mr Warner's report is included in the appendix. <br />The price of $150 per pound was used for this evaluation. Although the appraisal is <br />dated January 1995, it is slightly lower than the documented prices obtained for flee <br />material prior to April 1993, and therefore may be considered conservative. <br />Potential gold or silver values are not included in this evaluation, samples were not <br />taken for analysis. This could be done as a separate evaluation. <br />Areas Effected by the Property Acquisition <br />Map 5 shows the areas effected by the City oFCripple Creek property acquisition, <br />There are three areas that are evaluated. One for probable reserves and two for <br />possible reserves, Probable reserves are located in the zones to Llle north to a depth <br />of 50 ft. The area is larger Lhan Lhe boundaries of the tracts, because to preserve the <br />property line, near surface excavation must step back a distance that allows a slope <br />on the rock that is self supporting and safe (backslope). The angle used for this <br />determination is 60 degrees, a value established in tl~e district, at boLll Llre Altman <br />and Portland gold mining open pits. Underground mining can operate closer to Llle <br />boundaries, but the rock in this area is so soft and decomposed that at this depth <br />underground mining would be unsafe, impractical an not feasible. <br />Possible reserves include the same zone at a depth of 40 to 80 (t. The other zone is <br />near the surface to the south and includes the same backslope determination as <br />above. <br />For a backslope of 50 degrees and a depth of 50 ft the additional boundary distance <br />is 43 ft. <br />Mining would not be done on a continuous basis, but on campaigns that would be <br />timed to produce the amount of product that could he sold without effecting the <br />price. roe this evaluation it is estimated to be 2000 lbs. per year. It was also <br />assumed that the probable reserves would be scheduled to be mined first and then <br />followed by mining Clle possible reserves. <br />~ See References. <br />PIONEER ENGINEERING <br />