production on its 12 400 acres joint venture property located on the utah nevada border clifton mining company s property contains both patented and load claims and the company has a 250 tons day production mill facility . clifton mining clifton mining company summary just beginning to scratch the surface the clifton mining district the site of the first mill in utah were discovered and mined from the 1860s until the early 1900s . what attracted so many prospectors to the region is a series of abundantly mineralized shear zones most of which average between 2 1 2 and 10 feet wide and outcropping for more than a mile . for almost a century the area now known as the clifton shear zones near gold hill utah was divided into a jumble of independent mining properties that had been mined by the original owners of the clifton claims and later inherited by their families . because this had been an important historic mining district several large mining companies tried to consolidate these claims in the 1950s and 1960s . but because the separate ownership of these small irregularly shaped parcels made modern large scale mining impossible and because these companies were unable to negotiate with so many families they abandoned the attempt . william moeller presently the ceo of clifton mining spent more than two decades negotiating with these families and eventually acquired the heart of the clifton mining district . gold hill operations gold hill utah positive outlook for silver prices it is widely agreed by precious metals analysts that silver prices will rise sharply in the coming years . in each of the last 10 years world wide silver consumption has exceeded world wide silver production by more than 100 million ounces . the excessive inventories of the early 1980s have now been entirely exhausted and the u.s. strategic stockpile of silver 3 billion ounces not that long ago is now entirely depleted . inventories are at their lowest levels in more than 50 years and are continuing to decline . at the same time persistently low silver prices have left silver companies with impaired balance sheets and forced them to cut back on exploration . few new silver mines have been discovered in the past decade and little additional silver production is likely to come onstream for years independent of the silver price . on the demand side the silver shortage of the late 1970s led companies to restrict silver usage to only the highest value added applications . these applications would be profitable even with silver many times today s price . as a result of the insensitivity of both supply and demand to the silver price once inventories are exhausted the price of silver will rise sharply . this will make production from the clifton shear zones exceptionally profitable . location location location the clifton mining district is arguably in one of the best locations in the world for mining precious metals . it is readily accessible just over an hour south of wendover on the utah nevada border off interstate i 80 . yet it is remote with one of the lowest population densities in the country . it lies directly uphill from a u.s. air force gunnery range so that environmental concerns are as minimal as anywhere in north america . it is located in the u.s. where political risk is minimal and in utah one of the friendliest states to responsible mining . when standing atop a clifton ridge just about the only sounds one may ever hear are occasional fighter jet flybys or explosives testing taking place at a nearby u.s. military range . because of its isolation local policymakers in the sparsely populated region have welcomed clifton s combination of economic benefit and environmental conscientiousness . development in a remote relatively desolate area like ours is looked upon more favorably by agencies and government officials charged with balancing economic prosperity and environmental stewardship says moeller . the sounds in the distance remind me that as a mining enterprise our location represents an important strategic advantage . such favor was evidenced in 1996 when county officials authorized the issuance of industrial revenue bonds to finance plant construction at clifton s property . though the company has elected not to exercise its municipal debt option at present management realizes how rare this sort of seal of approval can be . if a bond issuance of this kind has ever been offered to another mining company i ve never heard of it happening says moeller . it speaks to the quality of our studies and the long term relationship we have fostered with local and state regulators . . it s like a treasure map someone has laid out for us . you can literally see the veins stretching across the mountainscape william d. moeller former ceo clifton mining resource summary the clifton shear veins the clifton shear zones are just one of the numerous gold and silver deposits found on the clifton joint venture properties . the shear vein system contains over forty identified veins that were mined historically in the 1800 s and early 1900 s. the shear vein system is made up of mostly patented mining claims . these claims were originally owned by as many as 100 surviving descendants of the original miners . it took management almost 30 years to obtain every patented claim in this historic mine area and to form them into one contiguous block of claims . two independent mine engineering reports have been issued on the property both outlining a very large ore potential in the shear vein system . but with recent changes in the laws governing the issuance of proven and probable reserve estimates neither of the two reports meet the new requirements and as such will not be discussed further herein . the veins are a rich source of silver lead and gold . the shear veins are unique in the fact that they come right to the surface . the shear veins are visible on the surface for distances of up to 6 000 ft. approximately 100 mine workings penetrate the shear veins and give access into the veins for distances of over 400 ft. the old workings are located on all sides of the shear vein property at varying elevations enabling the company to show consistent silver gold and lead values throughout the shear vein system . these veins were originally mined from about 1860 to the early 1900 s. at that time the ore had to be shipped at least 100 miles by wagon 3 to 5 tons at a time to be processed . this attests to the exceptionally high value of the mined ore . other clifton mineral deposits clifton mining s long term value is further enhanced by the identification of additional mineral deposits within the claim area . two additional types of mineral deposits have been discovered within clifton mining s property boundaries and there is strong evidence of a third . they are skarn deposits bedded replacement deposits and the probable third is a porphyry deposit . skarn deposits clifton mining s skarn system is a two mile long system with numerous surface exposures . see figure 1 . historical records in the area report some gold values associated with these skarns to be in the multiple ounce gold category . copper which is also associated with the clifton skarns can exceed 10 % . samples taken within clifton mining s skarn system have already shown values in excess of 0.3 oz . ton gold . further drill work and sampling will be necessary to delineate exact boundaries and tonnage potentials however it is currently estimated that clifton s skarn system may hold as much mineral value potential as the shear zones . bedded replacement deposits clifton mining has already discovered and assayed numerous bedded replacement deposits within the clifton claim block see figure 2 . . the assay values associated with these deposits have typically been very high grade . assay work completed on the surface and within accessible mine workings shows value ranges from 0.014 to 0.50 oz . ton gold 8.0 to 50.0 oz . ton silver 1 to 30 % copper monocco bedding and lead values from 7 to 34 % . current information shows average values within the bedded replacement deposits of approximately 0.04 oz . ton gold 12 oz . ton silver and 10 % lead . the clifton cabin bedding which was core drilled see announcement 11 3 97 showed average values of 28.11 oz ton silver 17.6 % lead and 0.013 oz ton gold . porphyry deposit clifton mining can also show strong evidence that a large mineralized porphyry system intrudes the property from the east side holding promise for a large deep seated copper or copper molybdenum deposit see figure 3 . . it is expected that this porphyry deposit will be similar to the ruth robinson deposit located only 70 miles south of clifton mining s property . the ruth deposit has produced 320 million tons of ore to date including 2.7 million tons of copper and 90 tons of gold . ultimate potential many geologists who have visited the clifton area have commented on the similarity of this district to the major gold producing areas of the carlin trend . there are the same indicator minerals for gold along with numerous silica blowouts called jasperoids . drill cores have shown intensive geological activity preparing the ground for significant mineralization . ultimately we hope this district will provide similar world class deposits of gold similar to those of the carlin trend . recent results the kiewit gold project is a low grade high volume heap leach gold project . the project started into production late in the fall of 2014 . the project is operated by clifton s partner desert hawk gold corporation desert hawk . desert hawk has announced that its intention is to produce 10 000 20 000 ounces of gold annually from this project . clifton receives a five percent 5 % net smelter return on the project for all precious metals coming from the kiewit deposit . heap leach projects start slow and then move to higher production and recovery of gold and silver metals as more metal bearing rock is crushed and loaded onto the pad . the management of clifton mining has recently completed an onsite inspection of the desert hawk clifton heap leach operation . now that the weather is cooperating the project has moved from limited winter production back into full swing operations . mining has commenced in a large way moving as many as 5 000 tons daily onto the large heap leach pad . leaching operations are expanding as the first layer on the pad is being filled . within a few months this much larger surface area will help increase gold production significantly . in the latest update desert hawk mining clifton s partner at kiewit has received approval to expand the current kiewit open pit operations to the east . this should roughly double the size of the pit substantially increasing both the rate of production and the mine life . new drilling that has been completed has revealed material of similar grade to the east of current operations . this shows that the system is not limited to the immediate area of the current pit and has confirmed the potential for this deposit to be significantly larger than had previously been anticipated . as rick havenstrite president of desert hawk put it all that has been previously known is that the mineralized structures from the kiewit pit outcrop 500 feet to the east of the original pit . due to topography it has not been previously feasible to drill in this area . we have been working for two weeks to develop a haul road and pre strip the new