SOURCE: North Bay Resources Inc.

October 04, 2010 08:39 ET

North Bay Resources Inc. (NBRI) Agrees to Acquire Ruby Gold Mine; Gold Production Expected to Begin By Mid-2011

SKIPPACK, PA--(Marketwire - October 4, 2010) -  North Bay Resources Inc. (PINKSHEETS: NBRI) (OTCQB: NBRI) ("North Bay" or the "Company") is pleased to announce that it has executed an option agreement to acquire the Ruby Gold Mine (the "Ruby") in Sierra County, California.

The Ruby Mine is an underground placer and lode mine located between Downieville and Forest City, in Sierra County, California. It is in the Alleghany-Downieville mining district, situated in the Sierra Nevada foothills south of the Yuba River, approximately 100 miles north of Sacramento and 90 miles west of Reno, NV. The property covers approximately 1,755 acres consisting of the subsurface mineral rights to 2 patented claims comprising 435 acres, and 30 unpatented claims comprising approximately 1,320 acres. 

The Ruby is one of California's best-known placer drift mines, and is considered by many to be one of the largest producing channel mines of modern times. It features a system of gold-bearing Tertiary channels that have already produced over 250,000 ounces of gold. The Ruby is also renowned for its production of coarse and jewelers-grade gold, with the largest gold nugget weighing 201 ounces. Gold nuggets from the Ruby are currently on display as the C.L. Best Collection at the Los Angeles County Museum of Natural History.

Total estimated placer gold production since the mid-1800's from the various mining districts in which the ancestral Yuba River gravels were exploited exceeds 20 million ounces, with the largest nugget from the Alleghany-Downieville district weighing 5,007 ounces. Historical production figures from the Tertiary channels of the Alleghany-Downieville mining district averaged in excess of 100,000 ounces of gold per mile of channel developed.

Permits in place include a Plan of Operations, a Phase I Environmental Site Assessment, a Water Order, and a Reclamation Plan secured by over $170,000 in Reclamation Bonds.

An estimated $3.5M in equipment and infrastructure is in place, including a 1,000 yard per day placer wash plant, 50-ton per day quartz mill, 6,000 feet of tracked haulage, and related support equipment needed for underground mining operations. A second exit, the Lawry Shaft, almost 2 miles from the main portal, can provide natural ventilation for much of the underground workings. Surface buildings and facilities include a lumber mill, machine shops, offices, and accommodations. The property also features an excellent system of roads, is accessible via paved highway from Reno or Sacramento, has abundant water and timber available for mining use, and has PG&E power available on-site.

A geological assessment during the summer of 2010 has identified 3.03 miles of unmined channel and 0.95 miles of partially mined channel available for mining using the existing infrastructure. An estimate of unmined gold was obtained by extrapolating the known average mining width and height of 200 by 6 feet, and an average historical grade of 0.164 ounce per cubic yard (27 cubic feet). It is further assumed that partially mined channels contain 50% less gold. From these calculations, it is currently estimated that 134,844 ounces of gold are available for near-term recovery from these channels using the existing Ruby infrastructure. Additional channels as well as lode deposits in quartz veins are known to exist on the property. These will require additional development and no attempt has been made as of yet to estimate the amount of gold they contain.

During the 2010 summer program, 35 samples were collected from the Lawry Shaft workings and sent to American Assay Laboratories Inc. in Sparks, NV for fire assay analysis. The samples, each weighing approximately 1 kilogram, were collected at 10-foot intervals at the gravel-bedrock interface at 5 locations (A through E) within tunnels and crosscuts. At location C, samples C9 through C12 returned several high values, including 45.5 grams (1.45 ounces) and 15.05 grams (0.48 ounces) per tonne gold, as per the table below. This represents a 30-foot wide zone of placer gold-enriched sediments in which 3 of the 4 samples are highly anomalous. This zone is considered mining width. Having delineated a 30-foot wide zone with a limited 35-sample set, we believe this indicates that gold-rich gravels are relatively abundant, easily identified, and present in old workings ready to be exploited. 

  Dry Au
  Weight Fire
SAMPLES lbs ppb
A1 1 4
A2 2 4
A3 1 3
A4 2 11
B1 2 12
B2 2 8
B3 2 14
B4 1 72
B5 2 61
B6 2 9
B7 2 4
C1 3 5
C2 2 3
C3 2 3
C4 2 4
C5 3 7
C6 2 20
C7 2 7
C8 2 14
C9 2 15050
C10 2 18
C11 2 45500
C12 2 785
D1 2 453
D2 3 6
D3 3 49
D4 3 12
D5 3 12
E1 3 23
E2 2 12
E3 3 8
E4 2 8
E5 3 15
E6 3 10
E7 3 25

Initial production is expected to begin in mid 2011. The target output is expected to be 250 cubic yards per day (approximately 375 tons) at an average grade of 0.164 ounces per bank cubic yard (BCY), for a monthly output of approximately 1,000 ounces of gold recovered. Production capacity and output is expected to increase by the second year of operations. Continued exploration and development of additional unmined channels as well as an undeveloped quartz vein believed to be the source of all the placer gold in the channel gravels are expected to increase resources and the life of the mine.

Under terms of the agreement, North Bay can complete the purchase by paying $2.5M in staged payments, of which $50,000 cash and 10 million shares of stock have been paid as the initial consideration to initiate the option to purchase agreement. Additional payments of $10,000 per month for the first 5 months and $25,000 per month for another five months thereafter have been agreed to during the option period. The Company can elect to exercise its option at any time, but no later than 10 months from the date of the contract. Upon exercise, the Company will pay a minimum of $85,000 per month, and must complete payment in full by December 30, 2012. In addition, the Company has issued warrants to the seller giving them the option to purchase up to 10 million shares of stock at an exercise price of 2 cents. These warrants shall expire on December 30, 2012. 

Up to $7.5M in funding for the Ruby project is expected to be provided through a federal program known as EB-5, which is intended to help stimulate the US economy by creating new jobs in rural areas and areas of high unemployment in the US. Authorized by Congress in 1990, EB-5 allows foreign investors to immigrate to the US by investing in qualified commercial enterprises that will directly benefit the US economy and create at least 10 full-time jobs per investor. Please see the Company news release dated August 16, 2010 for further information about the federal EB-5 program.

For further information about the Ruby Mine project, please visit the Ruby page on the Company's website at

Mr. C. Gary Clifton, P. Geo. is the Qualified Person as defined by National Instrument 43-101 for the Ruby Project and has reviewed this news release and the Ruby page at our website for technical accuracy.

About North Bay Resources Inc.

North Bay Resources Inc. (OTCQB: NBRI) is a junior mining company with over 150 mineral and placer claims encompassing approximately 60,000 acres throughout British Columbia, Canada. The Company's mission is to build a portfolio of viable mining prospects throughout the world and developing them through subsidiaries and JV partners to their full economic potential. North Bay's business plan is based on the Generative Business Model, which is designed to leverage its properties into near-term revenue streams even during the earliest stages of exploration and development. This provides shareholders with multiple opportunities to profit from discoveries while preserving capital and minimizing the risk involved in exploration and development.

The Company has recently filed registration documents with the SEC to become a fully-reporting company. Once the registration is effective, the Company will then be eligible to have its stock listed on the Over-the-Counter Bulletin Board (OTCBB).


This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities and Exchange Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainties. Although North Bay Resources Inc. believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any assumption could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion should not be regarded as a representation by North Bay Resources Inc. or any other person that the objective and plans of North Bay Resources Inc. will be achieved.

Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on our website (or press releases), such as "measured," "indicated," and "inferred" "resources," which the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form S-1 and subsequent Form 10-K which may be secured from us, or from our website at

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