Drumlummon - Montana

View the NI43-101 technical report on the Drumlummon project dated September 25, 2009.

View the NI43-101 technical report on the Drumlummon project dated November, 2008.

View the Montana Department of Environmental Quality - Drumlummon Mine Dewatering Approval and Stipulations.

Location & Background

The Drumlummon Mine Project is located near Marysville, Montana, about 25 miles west of the Montana state capital, Helena.

Financed by the Rothschilds in the late 1800’s the Drumlummon Mine proved to be one of the largest producers of gold and silver in the western United States. It is reported to have produced $29,000,000 of gold and silver at historical prices, primarily between 1883 and 1910.

The Drumlummon was shut down in 1910 and flooded at the deeper levels when the operators lost a court case alleging they had mined onto the neighbors’ adjacent property. It was shown that the main Drumlummon vein had strayed over to the neighbors’ property for a distance of 160 feet and the Drumlummon operators had mined that section without an agreement with the adjacent neighbor.

The Drumlummon court case went on for 20 years, including 5 appeals to the Montana and US Supreme Courts by the Drumlummon operators which they ultimately lost. At the final appeal to the US Supreme Court in 1910 there were 12 lawyers present and the cumulative legal costs are reported to have been in excess of $400,000 (early century US dollars).

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The neighboring company (St. Louis Company) then gained control of the Drumlummon but lacking mining expertise and wherewithal, never mined the deposit and leased it out to tributors. In a period between 1923 and 1929 it is reported that 90,995 tons were mined in this fashion. Another 68,662 tons is reported to have been mined between 1946 and 1951 before that operator’s mill burned down.

The Drumlummon is developed down to the 1,600 foot level with 2 shafts. Substantial areas of the mine have remained flooded since 1910 and effectively have been “out of bounds” since that time for exploration.

Ownership & Ground Positions

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RX Exploration has consolidated the Drumlummon mine claims, the former neighbors claims (St. Louis Company) and additional claims along strike.

RX Exploration currently holds 26 contiguous, surveyed patented mineral claims (approx. 290 acres) covering all of the former Drumlummon workings as well as the former neighbor’s property (St. Louis Company) that were subject to the early 1900’s lawsuit. An additional 68 unpatented contiguous claims have been staked by the company along strike covering approx. 1,390 acres.

RX Exploration holds a 100% interest in the 26 patented Drumlummon claims subject to making payments totaling $1.2 million over 5 years and a 2% NSR. That agreement was entered into during 2006 and RX Exploration is current with the commitment. The 1,390 acres of unpatented claims along strike are 100% owned by the company.

General Geology & Mineralization

The NI43-101 technical report filed by RX Exploration provides greater information about the geology and mineralization at the Drumlummon. Excerpts from the Summary sections of the technical reports about these topics include:

“The Drumlummon mine is a “bonanza" style epithermal deposit which are characterized by very high gold and silver.”

The deposit is related to Tertiary dacitic dikes and hosted by the Cretaceous Marysville stock and hornfelsed Precambrian sediments. The mineralization occurs as quartz fissure veins and silicified breccia in structures focused along the eastern margin of the stock. The primary ore minerals are native gold and silver sulfosalts.

Work Programs

In 2007 and 2008 RX Exploration rehabilitated the 400 foot level in preparation for underground diamond drilling which commenced in the spring of 2008 and continues to be ongoing.

In November, 2008 the company released its first resource estimate from underground core drilling of the newly discovered Charly Veins, located east of the old workings. In accordance with National Instrument (NI) 43-101, Timothy J. Beesley, P.Eng. of T.J. Beesley Geological Services Inc. calculated initial inferred resources of 155,518 tons containing 70,707 oz. of gold and 1,915,560 oz. of silver as summarized in the table below. View the November, 2008 NI43-101 technical report.

400E Vein	Estimated Tonnage	Grade Au (oz/ton)	Ounces of Gold	Grade Ag (oz/ton)	Ounces of Silver
A	67,284	0.39	26,192	12.2	820,166
B	39,740	0.53	21,097	7.3	291,053
C	48,494	0.48	23,414	16.6	804,341
Total	155,518		70,703		1,915,560

Drilling continued during 2009 on the Charley Veins and in an area of the former workings known as D Block. Throughout 2009 the Company reported the results of underground drilling and confirmed significant gold and silver values remain in the hanging wall and footwall of the old workings with mineralized intersections of up to 32 feet, gold values of up to 5 ounces per ton and silver values of up to 149 ounces per ton. (Refer to News) An update to the above resource estimate has not yet been made.

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Mike Gunsinger, the Drumlummon Project Manager observed that “the original operators of the mine used mercury amalgamation to recover the gold, a practice commonly used at that time. As a result, it appears they intentionally left behind most of the gold which was associated with areas of higher grade silver as the silver would hamper the gold recovery.”

In December, 2009 the Company commenced dewatering the former underground workings down to the 600 foot level, having successfully obtained the necessary permitting from the Montana Department of Environmental Quality ("DEQ"). Montana DEQ - Drumlummon Mine Dewatering Approval and Stipulations.

The Company’s goals for 2010 are to develop an underground decline to the 600 foot level in order to access the Charly Veins and the D Block zones; conduct test mining on the Charly Veins and D-Block zones; complete metallurgical testing; and continue to outline the resource through underground drilling and drifting. Underground diamond drilling is ongoing. (Refer to News)