Project Darwin, LLC.

Project Darwin, llc.
PO Box 29
4901 Darwin Mine Rd.
Darwin, CA 93522

Jack E. Stone

Phone:
(775)482-2015
Cell:
(775) 772-0446
On-Site:
(760)876-8056
On-Site 2nd:
(760)876-8024
Fax:
(775)482-2018

Email Addresses:
Jack Stone:
Zincmine@wildblue.net
Linda and/or Jack Stone
Nevmachine@frontiernet.net
Webmaster: Krystle Stone
Stonegirlnv@gmail.com

Link To Movie

Project Darwin

Contact: Jack Stone
Project Darwin, LLC.
P.O. Box 3010
200 McCulloughTonopah, Nevada 89049
Office: (775) 482-2015 Cell: (775) 772-0446
Email: zincmine@wildblue.net
Website: www.projectdarwin.net

The information contained herein is believed to be true and correct. The reader is not to rely on any such representations expressed or implied and any potential investor or buyer is encouraged to investigate all matters concerning the statements made herein and not rely upon them. All financial operating expenses, sales and profits are “Projections” and should not be construed to be facts or relied upon to make an investment in the project. This document and all exhibits hereto attached are for information purposes only and it is recommended that any party investigating this opportunity use normal and customary due diligence to satisfy oneself before considering an investment in this business opportunity. This document and the attachments are not to be construed to be a solicitation to purchase or sell the mine or a solicitation to purchase stock or other equity.

THE DARWIN MINE

BUSINESS SUMMARY

The Darwin Mine, located in Inyo County, California, approximately 100 miles south of Bishop, California has over a hundred years of history, producing profitably when market prices were favorable and conversely, closing down when metal prices fell. During the late 1970’s the Chinese systematically dumped one low priced base metal after another on world market, closing down hundreds of hard rock mines across the United States. The Darwin mine was one of these mines.

The overall project is a combination of a number of mining claims and mineral deposits. The actual Darwin mine covers an area of 1,050 acres of patented claims representing over a dozen large-scale mining operations.

Originally consolidated by Hearst/Rockefeller (Signal Oil), the mine was sold to Anaconda Copper in 1944. After Anaconda sold the mine, various mining companies, including Blue Range Mining and Cyprus Minerals, as well as several leasers have explored and operated Darwin. In 1996, with the market cost of base metals still low, my now deceased partner and I purchased the property from Blue Range. When my partner passed away in 2002, my wife and I purchased the remaining shares from his estate thus taking full and complete ownership of the property.

We have invested heavily in the mine over the past 12 years including bearing the costs of maintaining water rights, rights of way, security and miscellaneous fees. We have also secured the documented work of Cyprus Minerals, generated in 1991 and have compiled all geological information including engineering reports, mapping, drill cores, and re-logs totaling $28M in value, development that at today’s cost would be worth over $320M. Additional investment value from the mine acquisition includes $7.5M in equipment, rail underground, ore cars and over $2M expended in the past two years alone in maintenance, taxes, and fees. There is over $55M of hard and soft asset value in the property.

The mineral processing of the ore that will be mined underground at the mine site will initially be done at a pilot mill in the lab at Darwin, then at a mill located at the 400 Level of the Thompson mine over a mile into the mountain. Dry compacted tailings insure a zero discharge operation. A 450 ft. raise will provide adequate ventilation, access and secondary escape. The design capacity of 600 TPD will allow the grinding to be rotated out to avoid shut downs in production, and permit maintenance without disrupting production. Sulfide and oxide circuits will be installed.

With a documented historical record of high profitability, 40 percent direct-ship ore, and a four to one ore to waste ratio, exploration has continued. Today, bedded ore bodies and breccia pipes and pillars, rich in silver and base metals, have been blocked out and are ready to mine. Only a small fraction of the more than 1000 acres of the area making up the Darwin Mine Project have actually been mined or drilled. The various ores making up the Darwin mine consist of a potpourri of base metals including lead and zinc (both oxide and sulfide), copper, silver, cobalt, tellurium, bismuth, and tungsten.
Based on the work by Cyprus, we project a bulk ore target of fifteen million tons of zinc ore at 10 percent zinc indicating the potential for a 155 year mine life for this metal alone. A potential copper porphyry deep beneath the Defiance-Essex-Thompson breccia pipe system is another substantial target. During the initial phase of the project 10,000 feet of core drilling is planned, developing the large targets while mining the historical reserves of 180,000 to 330,600 tons of ore.

The mine contains over one hundred thirty eight miles of drifts, 3.2 million tons of ore and waste mined, rail, hoists, pipe, in place water rights, and existing surface facilities. These investments make this project unique and interesting. The operation can be fast tracked to production and cash flow, especially considering the Conditional Use Permit issued by the State of California, allowing the mining of 350 to 500 tons or ore per day from the start.

Our processing plan is based on state-of-the-art, base and precious metal production technologies taking full advantage of modern hydrometallurgical advances including ion exchange and differential sulfide flotation to produce lead, zinc, copper, silver, cobalt, tellurium, bismuth, and tungsten. Initial flotation work has indicated that recovery of 70% to 90% of contained metals can be expected.

Our initial development plan to produce revenue and cash flow is to crush and grind the ore and produce two concentrates. The tungsten concentrate will be direct shipped to buyers. The second concentrate will be separated by differential flotation to a lead-silver and a zinc concentrate. These concentrates will be transported to the Port of Long Beach for sale. Tailings from the mine will be filtered and used as back fill. With two million tons in targets above the lowest level developed, we will have adequate time to deepen both shafts in order to explore and develop potential deep zinc skarn deposits. Initial profits will allow us to drill the balance of the 1,050 acres which are untouched to date.

Using historical average production numbers documented from a recent underground project similar in nature, we estimate a total per ton cost of $159, with an average ore value of $667 per ton, with a sale price of $534 leaving $375 per ton for debt service and profit.

We have been contacted by the Remington and Winchester cartridge companies and Kennametal, in addition to Wolfram Bergau and Hutten about the purchase of our tungsten concentrates. We have also been recently contacted by five separate Chinese groups. These buyers, who have completed validation sampling, have verbally expressed interest to buy concentrates, allowing the project to generate cash flow prior to completion of our facility. We are now awaiting official, translated Letters of Intent to buy concentrates from the five Chinese refiners. We also have a Letter of Intent from a New Zealand buyer to purchase tellurium concentrates.

Our preference is to produce metal concentrates thereby commanding a high profit on the world market and a substantial return on investment. The project funding requirement is $ 30M and we are open to either debt or equity financing. We feel that our projected net pre-tax profit per year will escalate as projected prices climb to the previous highs of 2008. In addition, oxides and their minor metal content could generate additional revenue per year.

The Darwin Mine can and will become the benchmark domestic producer of high grade base and precious metals using low cost, high-grade selective mining while generating local jobs and profits for our company.

The Darwin Project team looks forward to providing any additional information to prospective investors and will be happy to answer any and all questions or concerns presented. Additional supporting documentation is available at our website, www.projectdarwin.net. A 14 minute, 890 MB DVD file of the project is available for email transfer using a free software download called Pando (http://www.download.com/Pando/3000-2196_4-10546621.html?tag=mncol)


Funding requirement: $30M based on equity

The owners are open to either debt or equity financing, and terms are negotiable.

First Phase $ 10M – Fund contract for acquisition and construction of drilling, haulage and support equipment, electrical upgrades, rehabilitation of underground hoisting facilities and the start of acquiring permits not already in hand.

Second Phase $ 10M – Sixteen months from start, depending on Nevada permitting which is estimated at 16 months by the State of Nevada, Office of Environmental Protection. The investment will also fund additional Containment, Development, and Operational Costs.

Third Phase $ 10M – Twenty-four months from start, contingencies, operational expansion upon permitting at the Darwin mill site, double production.


Financial Summary: Use of Funds (see budget)
Basis of Revenue Projections and Costs:

Mine startup and initial capital costs include permitting (completed) from Inyo County and a six month utilities and equipment renovation schedule in preparation for aggressive mining of the bedded ore which is readily accessible on the 400 Level. Even though significant resources are available for mining at this time, the long-term benefits of the 5-month renovation time schedule significantly outweigh the short-term economic gains associated with starting mining immediately. During the construction period, required site work and construction of the oxide and sulfide milling circuits will be completed.

Operation Headquarters in Nevada will be in Tonopah, Nevada.

Mine & Mill Revenues: The primary source of revenue for the mill is processing the ore from the mine. This ore is scheduled to be mined at an average of 350 tons per day after the mine renovations are completed. Initial revenues will be based on selling the raw, high-grade ore to interested third-party buyers.

The average value of a ton of ore at Darwin at current prices is $640.00 per ton. For reasons of conservatism, this figure is based on historic mill feed and excludes the 40% direct ship ore. Production costs are expected to be less than $159.00 per ton, dropping to $129.00 when production increases and construction is complete.

The historical and projected ore to waste ratio is 4 tons of ore to 1 ton of waste. There is a 10% contingency across the board in the detailed Financials. The Financials are presented as a separate file from this plan.


Ownership / Patents / Claims / Water Rights:

The Darwin Mine represents +- 1,050 acres of fee simple and patented land (not BLM leased land), with 58 patented mining claims in the world renowned Darwin District. In addition, negotiations are in progress to acquire seven additional patented claims (about 136 acres) with historic lead-zinc-tungsten production near the main claim group. The historic Anaconda tailings area is covered by placer claims (120 acres) owned by Mr. Stone and family.

The patented claims span over 5 miles representing the consolidation of many well know producing mines including the Bernon, Defiance, Essex, Independence, Rip Van Winkle, Thompson and Lucky Jim mines. The several principal mines formerly operated by Anaconda are interconnected by the existing 9,600-foot Radiore Haulage Tunnel or 400 Level which provides effective economical access to the Darwin Mining Project for the purpose of hauling high-grade ore to the surface.

Extensive drilling and professional geological analysis by a number of mining experts have identified large proven and targeted ore deposits which reflect major veins, skarns and bedded deposits of ore though-out the mine’s 150 miles of underground workings.

Adequate water rights (which limit many mining operations in the area) were perfected and recorded in 1998 for the Darwin Mining Project. These water rights provide approximately 15 million gallons of water per year to support the mine. Ample three-phase electrical capacity is available at the mine at a fixed, below-market $0.0647/kWhr rate by recorded agreements.

The mill site is located on private land (not BLM leased land) for the processing of the mine’s high grade ore. The mill site has sufficient water for the planned operation.

Operation headquarters will be located in the community of Darwin, California. Adequate structures for offices, shops and warehouses are located at the mine site. The existing mine office/engineering building contains three walk-in vaults for secure storage of documents and maps. These buildings will be renovated allowing the mine and mill operations to be centralized with minimal overhead expenses.


Mine History:

For an in-depth history of the Darwin Mine and its surrounding area, the article “The Mines and Minerals of Darwin California” was a featured article in Mineralogical Record (Jan.-Feb. 1984 Issue). This article can be found on our website.

The mine was actively producing as one of the largest strategic metals mines in the US during World Wars I and II, and was owned by Anaconda between 1944 and 1983. In the 1970’s, the mine was operated by several leasers (West Hills Exploration, Mexicanus-Colorado, and Montecito Minerals) with royalties paid to Anaconda.

Despite the mine’s substantial proven reserves, the mine was closed down (as were most U.S. base metal mines) when China flooded the market with base metals at depressed prices cheaper than it cost U.S. mining companies to produce. Underground mining at Darwin ceased and mining opportunities were limited to processing the existing tailings (estimated to hold over $200M in silver and base metals).

The mine was sold to Quintana Minerals in 1983, and resold to Blue Range Mining Company in 1989. Both companies abandoned their planned surface-based (heap leach) processing of the tailings because of low silver prices, although metallurgical feasibility was determined.

In 1992, the mine equipment was sold to Stone Brothers Nevada Machinery. In 1996, the mine and patented mining claims were acquired by Project Darwin LLC owned by the current mine owners, Jack and Linda Stone.

After completing the California EPA requirements for site restorations, the Darwin Mining Project was secured and maintained, awaiting an increase in metal prices to reactivate the mine operations.


The Opportunity:

The Darwin mine is noted to be one of the most extensively designed, studied, technically researched and documented strategic base metal mines of its size in the U.S. The extensive, high quality Anaconda mine records and maps have been preserved, and were updated by subsequent operators.

Due to expanding worldwide demand for strategic base metals similar to those proven in abundance in the Darwin Mine and China’s need to export less of these metals to the U.S., base metal prices have seen substantial increases in the past year (see Historical Base Metal Pricing Trends on the website).

These events now provide economically viable reasons for reactivating the Darwin Mine. China has aggressively begun purchasing many foreign and U.S. base metal underground mines to enhance its reserves and satisfy its own growing demands.


Tungsten: Until recently, China provided nearly all the tungsten to U.S. for manufacturing of tungsten carbide cutting tools, alloy steels, light bulb filaments, automobile and electronic parts, LCD flat screens, etc.

For years, China has dominated international tungsten production and markets producing about 85% of the world’s output and consuming about 50% of the world’s tungsten demand. China’s demand has increased about 30% since 2007 due to its rapidly developing manufacturing capacity and the need for hardening products. This increase in demand and continued depletion of their reserves has continued to the present day.

Of significant importance, the Chinese government imposed an export quota on tungsten to decrease the domestic price of tungsten (in China), and increase the global price. As a result of this quota and the inability of global supply to keep up with global demand increases, the price of tungsten has risen from under $5/lb to over $21/lb. This price is expected to remain stable for the foreseeable future. In 2006, China privatized their mines. Exports to U.S. stopped January 1, 2007. As such, demand for tungsten from U.S. manufacturers has become an even more significant issue.

The Darwin Mining Project, when fully reactivated, will represent the first and only large operating Tungsten mine operating in the U.S. It will be years before other large mines will be able to open due to their extensive permitting requirements and reserves. The former Union Carbide Pine Creek mine near Bishop, California, largest tungsten producer in the U.S, was dismantled and has been experiencing problems permitting for reopening.

Zinc: The world’s largest zinc mine, Xstrata (see E&MJ WOMP) has recently reported that demand for zinc worldwide will increase an average of 3.7% annually from 2007 to 2017. Many of the reports published on the Darwin Mining Project website note the mine’s extensive potential zinc resources (10M to 15M tons).

The Darwin Project mill site in California will be improved with a medium scale metallurgical process plant. This advanced processing technology will be designed to produce concentrates.

Geological Reports / Ore Resources:

Proven Mineral Resource: Based upon extensive testing at the Darwin Mining Project, the explorations reflect resources totaling approximately 180,000 tons with the following composition: Does not include Copper, Cobalt, Bismuth, Tungsten or Tellurium.

Probable Mineral Reserves: According to professional drilling results at the Darwin Mining Project at depths between 100 feet and 2,200 feet, there are estimated resources to be within a range of 2.8 million to 15.0 million tons of high grade ore. Two core holes were drilled to the 2,200 foot level and assayed. The following results reflect the higher values into the lower depths:

Defiance/Thompson Mines: Breccia Pipes – during the past, the miners wanted every foot to pay, thus the Defiance and Thompson winzes (internal shafts) were sunk in high-grade ore. The shaft collars and pillars hold a total of thousands of tons of high-grade ore. Sinking an alternate shaft would allow us to take this ore. There is a bedded ore body of 750,000 tons open on the 400-foot level, as well as 100,000 tons in the 435 stope, which is located 27’ from the track.

Covellite: Numerous studies on the Darwin Mining Project show a strong occurrence of covellite (copper sulfide) projected to be approximately 15,000 tons, with the following values:


Testing at the Lucky Jim and Thompson mine areas of the Darwin Mining Project at all levels, also suggest a high-grade tungsten / low-grade gold deposit.

To date, given the expansive size of the Darwin Mining Project, less than 5% of the patented mine claims have been drilled, sampled, tested and assayed. Therefore, additional research and drill exploration (core samples) are planned to validate the additional proven reserves of the Darwin Mining Project under the worldwide recognized guidelines of the Canadian National Instrument 43-101 Standard.

Assay Reports:

Independent assay reports provide an accurate summary of fire assays (high temperature crucible tests) and standard base and rare metal analyses conducted on samples of high grade ore from the Darwin Mining Project. These concise reports identify the proportion of metals in the ore, providing an accurate indication of minerals in the mine.

Assays completed on ore from the Darwin Mining Project over a number of years by several reputable companies all suggest that there are economically viable reasons for reactivating the Darwin mine. Assay results are available on our website.

Management Team:

The Darwin Mine Management team represents more than 100 years of hands-on, proven experience in the mining industry.

Jack Stone (Manager) – Represents 100% ownership in Darwin Mining Project, including both the mine and mill operations. Mr. Stone has operated his own construction business since 1982, specializing in large mills, construction and relocations, and placer plants including construction for the U.S. Military. He has worked for a majority of the mines in the state of Nevada completing over $75 million in sales, construction and demolition. Mr. Stone is both a qualified hands-on manager and an underground certified MSHA (Mine Safety and Health Administration) instructor. He consulted at the Darwin mine when previously owned by both Anaconda and Blue Range and ultimately purchased the mine in 1996. Mr. Stone has extensive mining experience with base metal underground hard rock mines.

Earl Harrison – Is the lead Mine Foreman for the Darwin Mining Project. Mr. Harrison was named Mine Manager in 2005 for Golden Phoenix Minerals with direct responsibility for the operations of the Ashdown Molybdenum Mine and Mineral Ridge Gold Mine. As Mine Manager, Earl assumes responsibility for all company-wide mine planning, permitting and operations. Earl is a 40-year veteran of the mining industry. He received his training at the Mackay School of Mines and the University of Idaho School of Mines. Earl has extensive hands on experience in both mining and milling.

In the early 70’s he operated a flotation mill for Kennecott, producing molybdenum and copper. Prior to that, he worked at Ward Mountain, driving a 10,000-foot haulage way through bad ground for Phillips Petroleum. In the late 70’s he was a member of the team working a 330-ton/day underground operation at the Gooseberry Mine, extracting gold and silver from a narrow vein structure using flotation and cyanidation.

In the early 80’s, he ran the New Savage Mine near Virginia City, Nevada, driving 6,000 feet of decline in bad ground using square-set stoping, heavy timbering and spilling. For six years, he managed the Independence Mine near Battle Mountain, Nevada working a narrow high-grade gold and silver deposit using heap leach and counter current decantation methods. Later, he managed the Mary Mine (now part of the Nevada Mineral Ridge complex) for Homestead Minerals, producing 800 tons/day of gold and silver ore, yielding profitable results. Earl has also worked overseas, directing an underground lead/zinc/gold mine in China for Orient Minerals. Since September 2004, Harrison has supervised preparatory work at the Ashdown molybdenum mine and spearheaded the permitting process for its underground operations.

Michael R. Garverich, P.E. – Is the Senior Geologist for the Darwin Mining Project. Mr. Garverich is a licensed Professional Engineer with vast experience in nearly all fields of mineral exploration, production and processing, hydrology, facility permitting, construction, environmental compliance, geotechnical, engineering, and reclamation. Mr. Garverich’s experience ranges from being Chief Geologist for the Darwin Mine under the previous Blue Range ownership to State Geologist for the USDA-NRCS (Montana). His vast experience and extensive knowledge of base metal underground hard rock mines (specifically the Darwin Mine) represents a strong asset to the Darwin Mine management team.

Bob Wickedon, P.E. – Is the Senior Engineer for the Darwin Mining Project. Mr. Wickedon is a licensed and Registered Professional Civil Engineer in both Nevada (CE 9835), and California (RCE 29826), and a Registered Land Surveyor (LS 4661).

Mr. Wickedon has extensive management experience through his former private engineering and land surveying practice. His background includes positions as County Road Commissioner, County Engineer, County Land Surveyor, and most recent job as Nye County Public Works Director and Land Surveyor. Mr. Wickedon’s experience and knowledge of civil engineering and close relationship with the BLM, Nevada Division of Environmental Protection Agency, and U.S. Department of Wildlife provides a strong asset to the Darwin Mine management team.

Dan Kappes – Kappes, Cassidy & Associates (KCA) is one of the most respected metallurgical engineering firms in Nevada providing process metallurgical services to the international mining industry. KCA specializes in all aspects of heap leach and cyanide processing including laboratory testing, project feasibility studies, engineering design, construction and operations. KCA is experienced with design capabilities in a wide range of metallurgical processes including a patented zinc oxide circuit, which is proposed for the Darwin Mining Project mill site near Tonopah, Nevada.

Richard Harris - Harris & Thompson is Legal Counsel for the Darwin Mining Project. Mr. Harris has extensive legal expertise in Natural Resources Law, Environmental Law, and Corporate Law. Mr. Harris graduated from Stanford University (M.S. in Mining Law) and from the University of Nevada (B.S. in Geological Engineering, with distinction, (1969). He also received an M.S. in Environmental Science in 1995.

Mr. Harris is a member of the Washoe County and American (Member, Natural Resources Law Section) Bar Associations; State Bar of Nevada; State Bar of California (inactive); American Institute of Mining Engineers; Nevada Mining Association; Geological Society of Nevada; Nevada Landmen’s Association and Rocky Mountain Mineral Law Foundation.

Conclusion:

The Darwin Mine is currently permitted under a Conditional Use Permit. There are ore cars at the portal ready to move. Highly qualified geologists have reviewed the over $ 28M in engineering, mapping, and drilling and concur that the re-opening of the Darwin Mine can produce a highly profitable venture.

This project will conservatively generate over $ 195M in cumulative pre-tax profit in the first five years. This profit figure is based on current metal prices which according to projections could easily double or triple as demand and pricing increase in the future.

We look forward to working with serious investment professionals to develop the Darwin Mine into a premier, world-class, base and precious metals mine. When in full operation, the mine will stand as one of the most profitable mining ventures in the continental United States.