Sandman

Sandman is located in Townships 36 and 37 North, Ranges 35 and 36 East, Mount Diablo Meridian, Humboldt County, Nevada, USA. The property is situated south of the Slumbering Hills and west of the Tenmile Hills, circa 24 km northwest of the town of Winnemucca, Nevada. The property lies 23 km south of the successful Sleeper gold mine¹ which historically produced 1.7M oz Au with M&I Resources in excess of ~3M oz Au² (Figure 1). Sandman is accessed by driving west from the town of Winnemucca on Jungo Road for 15 km, and then an additional eight km to the north on dirt roads that lie largely within the property boundaries.

Sandman lies along the north-northwest-trending eastern margin of the Sleeper or Kings River Rift, which is regionally part of the Central Northern Nevada Rift (NNR). The Sleeper Rift consists of a regional aeromagnetic and gravity linear high that extends from the Idaho border to the Sleeper gold mine (located 23 km N-NW of Sandman; Figure 3), through Sandman, and through the Goldbanks gold deposit (located 48 km S-SE of Sandman). Much of the property area is covered by windblown sand deposits and Late Tertiary to Quaternary basalt. Mapping, exploration drilling, and extensive shallow auger drilling through the sand indicate that most of the sand and basalt in the project area are underlain by a section of Tertiary tuffaceous rocks and andesite, which in turn overlie Late Triassic to early Jurassic metasedimentary clastic and subordinate carbonate rocks.

The Southeast Pediment, Silica Ridge, North Hill, and Abel Knoll Au+Ag mineralization at Sandman are classified as low-sulfidation, quartz-adularia, epithermal deposits. The mineralization is hosted by Tertiary volcanic rocks, primarily in tuffaceous units, andesite porphyry, tuffaceous sedimentary units, and basalt. Northwestern Nevada contains a number of similar middle Miocene Au-Ag deposits that occur in silicic volcanic or subvolcanic rocks, including the Sleeper, Tenmile, National, and Hog Ranch deposits (Conrad et al., 1993). The abundance of adularia and relative paucity of silicification associated with much of the Sandman mineralization compares more closely to the mineralization type at the Round Mountain mine located to the south in Nye County, Nevada.

In general, higher-grade gold mineralization at Sandman can be stratigraphically controlled along contacts between basalt flows, interbedded fluvial conglomerates and tuffaceous rocks (e.g., North Hill Deposit), or structurally controlled as lens-shaped pods, with high-continuity, lower-grade disseminated gold in sediments and volcanics (e.g., Silica Ridge and SE Pediments Deposits). Quartz-adularia alteration dominates the ore zones, whereas propylitic, argillic, and sericitic alteration are associated with the known resource areas more distally.

EXPLORATION POTENTIAL

Exploration work completed at Sandman to date has resulted in the discovery of four gold deposits and the identification of other target areas that remain to be explored. Sandman provides the potential for near-term production from one or more of the known deposits. There is also excellent potential for the discovery of new precious-metal mineralization beyond the limits of the deposits, as demonstrated by the discovery of the Abel Knoll deposit in 2006.

Gold Bull believes that Sandman is a property of merit that warrants significant additional expenditures. Programs aimed at increasing the size of the Sandman mineral resources and defining new areas of mineralization are justified in a Phase I work program. Drilling at the four deposit areas in 2006 and 2007 concluded with open-ended mineralization in a number of drill holes, and step-out RC drilling in these areas should continue.