The stockpiled ore being delivered to GSM is from previous mining activity by a third party which Steele is removing under Montana Department of Environment Quality (DEQ) approval.
Steele said due to the nature of the ore, there is a large amount of variance in the grade, and independent fire assays have indicated a grade of about .10 ounces per ton of gold yielding a gross potential value of up to $1.65m.
According to the company, the ore is being removed from the historic mine site to a DEQ approved transfer site to be consolidated and crushed and then will be delivered at a rate of about 200 tons per day for processing.
Under the processing agreement, GSM will buy the ore from Steele based upon the assayed grade per delivered ton.
Steele said this is the first phase of development at the Mineral Hill gold project, and third party historical reports have estimated that the region could contain roughly 860,000 ounces of gold.
The company intends to continue to develop the asset and expects to begin active mining on the project by the second quarter of 2012.
