From the July 2nd conference call:

Greg Sparks: The principal difference between alluvial deposits and hard rock deposits are alluvial deposits consist of gold that has been transported generally by water.And in order to do that, it has generally been parted from the host mineral or host rock so that it exists as a free particle of gold, not attached to a particle of waste.

The significance of that is that it makes alluvial gold typically far more amenable to simple gravity processing.When I say simple gravity processing without going in to the details of what that means exactly, it’s much less technologically complex and it’s much less capital intensive and it’s generally much less expensive to operate.So as a consequence of all that, nature has done a pretty good job of liberating the gold from its host rock in the case of alluvial deposits.

Having said that, alluvial deposits are frequently stratified in these sand and gravel layers.So one must find a locus of a sand and gravel layer wherein the gold has actually been concentrated.Generally speaking the alluvial deposits are also very near surface with little overburden as in the case of this Zone Two with only about ½ a meter of overburden material that is not auriferous.

So that lends itself to less expensive mining as well.So the bottom line is alluvial operations are generally less expensive from a capital investment standpoint and less expensive from an operating standpoint.However, even under the best of circumstances recovery of contained gold in an alluvial situation using simple gravity recovery means is not typically as high as it is using full-blown crushing, grinding, milling techniques like cyanidation and so forth, of hard rock gold.So there are pluses and minuses to both, but certainly in terms of cost of entry and cost of operation and capital risk vs. opportunity, a good alluvial deposit is quite attractive.

Caller: It sounds like you can be up and running fairly quickly with this method?

Greg Sparks: Yes, because it’s a fairly simple procedure, the setup of the equipment and preparation for mining is minimal relative to hard rock operations.So we think we will be producing under the test mining scenario before the end of summer.

[Irwin Olian then made comments regarding specific steps the company could take to increase recovery rates by adding chemical processes.He noted that this would not prevent the company from producing gold using the gravity method in the meantime.]

http://scminerals.com/894643_S2_20090702194523.WAV