The Flagstaff Gold Mine is located in the Virtue Mining District approximately 12 km near Baker City, Oregon and 0.8 km off Highway 86, a paved highway, with ready access to rail and power. The link shows location, topography and geology.
Property Tenure & Initial Work Program
Armadillo announced a Letter of Intent to acquire Flagstaff from Dimari Enterprises LLC of Pasco, Washington on November 30, 2012. In early March 2013, Management conducted a visit to the site with Dick Coughren, President of Dimari and they finalized the transfer of the Mine from Dimari to Armadillo. Additionally, as of March 21, 2013, negotiations are underway regarding the securing of a mining contractor with the experience required to establish the drift needed to gain access to the existing tunnels of this historic mine site. The Company is also negotiating contracts with Mr. Freddie Quimby, the mining contractor, and Mr. Brian White, the geologist who wrote two of the reports on the Flagstaff mine.
Armadillo paid Dimari US$ 10,000.00 upon signing the LOI and paid US$20,000 on singing of the Exploration Agreement. The Company intends to complete an initial program of sampling, trenching, and drilling including an upgrade to the existing tunnels to gain access and verify the existing orebody. After verification, Armadillo will pay US$50,000.00 and issue Dimari 500,000 common shares of the Company. A further payment of, US $50,000 per anniversary date or a 25% royalty from production, whichever is the greatest to a maximum total payable of US$5,000,000 will also be required.
History and Past Exploration
The Flagstaff Mine has a long gold production history having been owned by a French company who owned and operated the mine from 1898 until 1914. Labor disputes disrupted production and the mine permanently closed when the fully timbered double compartment elevator shaft and timbers in the tunnels mysteriously caught on fire.
Gold production from the Flagstaff Mine most likely never totaled more than 10,000 ounces from narrow, low-grade sulphide veins. The old workings also explored oxidized, disseminated gold mineralization in zones that have been known to be up to 20 feet wide but also have been reported to reach widths of to 40 feet within old workings that are now caved.
Mr. Quimby in a 2006 report prepared for Dimari , noted there are several veins on the property traced for two miles in the valley. The Flagstaff massive quartz vein at the 360 ft. level consisted of a body 300ft. deep by 300ft. long averaging 1.5 feet wide. A total of 13,500 tons of 0.42 opt au 5,670 ounces was estimated. The Big Ledge vein on the property is exposed at the 260 foot level of the mine for a distance of 520 feet. One stope is opened on this level for a length of 125 feet. Values of 0.89 opt au ton were reported. There is an estimated, 216,666 tons for a total of 192,832 ounces of gold. In addition, to the 360-ft level of the Big Ledge, it is estimated there are 83,333 tons at 0.89 opt gold for an additional 74,166 ounces of gold.
In a 1992 report by Brian G. White, P.Geo, for Hecla Mining Company, he noted;
"Underground examination and sampling of the Big Ledge indicated the possibility of an extensive body of this disseminated mineralization, that could average at least 0.20 opt Au across an average width of 15 to 20 feet, and possibly total several million tons and be exploited by underground mining."
**The reports mentioned were not done by a qualified person and are classified as an historical estimate not as current mineral resources and Armadillo is not treating the historical estimate as current mineral resources.