North Bay Resources Inc. (OTCBB: NBRI)

North Bay Resources Inc. (OTCBB: NBRI)

North Bay Resources Inc. (OTCBB: NBRI) is a fully-reporting junior mining company with over 150 mineral and placer claims encompassing approximately 60,000 acres throughout British Columbia, Canada.

NBRI Snapshot

  • Transitioning from an exploration company to a gold producer in 2011
  • Low O/S, low float, majority owned by insiders
  • Acquiring the historic Ruby Gold Mine in the Motherlode District of Northern California
  • Total resource is estimated to contain up to 500,000 ounces of gold
  • Fully-permitted and ready to resume production this year
  • The Ruby Mine is famous for its jewelers-grade gold nuggets, the largest of which (so far) weighs 201 ounces
  • Annual revenue from on-going Joint-Ventures in Canada.
  • $3M  in work commitments from JV partners in Canada
  • $5M equity credit line in place
  • Non-dilutive EB-5 funding of $7.5 million in the pipeline
  • Planning to acquire additional operating mines in the western United States region

North Bay Business Plan

North Bay’s business plan is based on the Generative Business Model, which is designed to leverage its properties into near-term revenue streams even during the earliest stages of exploration and development. This provides shareholders with multiple opportunities to profit from discoveries while preserving capital and minimizing the risk involved in exploration and development.

Long-term commodity uptrend supports NBRI’s multiple assets being placed into production in order to achieve substantial profitability for shareholders. Organic growth through the accumulation of performing assets, is expected to generate revenue from gold mining operations once the Ruby Mine and other assets are in production.

Ruby Gold Mine in Sierra County, California

Production Plans

Initial production is anticipated to begin in mid-2011.

Currently, with a $5 million equity line of credit in place additional funding of up to $7.5 million is expected to be provided through the federal EB-5 program, and the exact date production will commence is contingent on when our Regional Center application is approved by the USCIS. Upon approval by USCIS for the planned Northern California Regional Center and acceptance of the Ruby Project for funding under the EB-5 program, we expect to hire a qualified mining engineer as the Ruby Mine Manager, and to provide a suitable budget to begin hiring up to 60 employees from the local area to commence mining operations.

Escrow Opens June 1, 2011, and Closes On or Before July 1, 2011

The purchase will be initiated with the opening of escrow on June 1, 2011, and will be completed with the closing of escrow on or before July 1, 2011. Upon completion of the Ruby Mine purchase, the Company will have also acquired all of the outstanding shares of Ruby Gold, Inc.  which will then become a wholly-owned subsidiary of North Bay Resources Inc.

Target Output Roughly 375 Tons Per Day

The target output is expected to be 250 cubic yards per day (approximately 375 tons) at an average grade of 0.164 ounces per bank cubic yard (BCY), for a monthly output of approximately 1,000 ounces of gold recovered. Production capacity and output is expected to increase by the second year of operations. Continued exploration and development of additional unmined channels as well as an undeveloped quartz vein believed to be the source of all the placer gold in the channel gravels are expected to increase resources and the life of the mine.

Mining Possible to Start Immediately Based on Infrastructure and Permitting

The existing infrastructure and permitting status make it possible to start up mining activity almost immediately. Four placer channels have been selected for initial mining, and they will be mined simultaneously as two separate projects; the Lawry Shaft Project and the Deep Rock Creek Project.

The Lawry Shaft Project targets two channels; the Mount Vernon Channel and the Pilot Channel. The Deep Rock Creek Project also targets two channels; the Deep Rock Creek Channel and the downstream extension of the Black Channel.

Once progress in the Lawry Shaft and Deep Rock Creek Projects is well established, a simultaneous program of exploration and development (E&D) is expected to be initiated. This is intended to be an ongoing program to prepare additional placer channel targets to provide continuous future production from the Ruby Mine placer channels.

Quartz Veins Provide Additional Exploration Target

The Ruby Mine’s quartz veins provide an additional exploration target. Exploration and development of the Ruby Mine’s quartz gold potential opens the possibility for additional gold production that will augment placer production and potentially extend total gold production far beyond the 10 plus years anticipated from the Ruby’s placer gold channels.

The Company exercised its option to purchase the Ruby Mine in Sierra County, California, in April 2011.

Two Contiguous Claim Groups

The Ruby property comprises two contiguous claim groups, the Ruby and the Golden Bear (aka Carson Camp), both of which include lode and placer claims. The Ruby claims combine three former producing gold mines; the Ruby, the Bald Mountain Extension, and the Wisconsin. The Golden Bear claims comprise several former producing mines as well, including the Golden Bear, the Ireland, and the Cincinnati. Collectively, the claims have produced in excess of 250,000 ounces of gold in a mining history dating from the 1850’s.

The property covers one and one-half miles of strike length along the Eastern Melones Fault, the major structure along which many of the gold deposits of the Mother Lode are localized. The property also encompasses an estimated 4 miles of partially mined and unmined auriferous Tertiary channels. The Ruby is located on the northern extension of the historic Mother Lode system, as evidenced in the map below that shows the location of the Alleghany-Downieville mining district in relation to the overall Mother Lode.

The Ruby Mine, a/k/a the Ruby Gold Project, is a fully-permitted underground placer and lode mine located near Downieville in Sierra County, California that is known to have produced over 250,000 ounces of gold since the 1850’s, and which is considered to be part of the northern extension of the historic Mother Lode system.

The Ruby Property covers approximately 1,755 acres, consisting of the subsurface mineral rights of two patented claims totaling approximately 435 acres and 30 unpatented claims containing approximately 1,320 acres.

During the 2010 summer program, 35 samples were collected by Mr. Clifton from the Lawry Shaft workings and sent to American Assay Laboratories Inc. in Sparks, NV for fire assay analysis. The samples, each weighing approximately 1 kilogram, were collected at 10-foot intervals at the gravel-bedrock interface at 5 locations (A through E) within tunnels and crosscuts. At location C, samples C9 through C12 returned several high values, including 45.5 grams (1.45 ounces) and 15.05 grams (0.48 ounces) per metric ton (tonne) gold, as per the table below. This represents a 30-foot wide zone of placer gold-enriched sediments in which 3 of the 4 samples are highly anomalous.

This zone is considered mining width. Having delineated a 30-foot wide zone with a limited 35-sample set, we believe this indicates that gold-rich gravels are relatively abundant, easily identified, and present in existing workings ready to be exploited.

Plant, Equipment, Permits, and Site Infrastructure

The equipment, fixed assets, and infrastructure in place have been valued at an estimated $3.5 million, and include a 1,000 yard per day placer wash plant, 50-ton per day quartz mill, 6,000 feet of tracked haulage, and related support equipment needed for underground mining operations.

The property also features an excellent system of roads, is accessible via paved highway from Reno or Sacramento, has abundant water and timber available for mining purposes, and has PG&E power available on-site.

Site inspections conducted during June and July, 2010 by C. Gary Clifton, a certified professional geologist (P.Geo.) retained by the Company as an independent consulting geologist to inspect and assess the Ruby Mine, and by management in September, 2010, confirmed that the Ruby is in excellent condition, and has been well maintained despite having not been operation since 1998. The equipment currently on-site at the Ruby was mostly purchased in the period between 1990 and 1995 when the mine was last in production, and is therefore between 15 and 20 years old. The equipment, including the wash plant and mill facilities, has been confirmed to be in good working order, though some minor upgrades are expected to be needed once operations resume. Upon the exercise of our option to purchase, management believes the mine can be placed back into operation in a very short period of time.

Equipment, Fixed Assets and Infrastructure Value Estimated $3.5 M

The equipment, fixed assets, and infrastructure in place have been valued at an estimated $3.5 million, and include a 1,000 yard per day placer wash plant, 50-ton per day quartz mill, 6,000 feet of tracked haulage, and related support equipment needed for underground mining operations. A second exit, the Lawry Shaft, almost 2 miles from the main portal, can provide natural ventilation for much of the underground workings. Surface buildings and facilities include a lumber mill, machine shops, offices, and accommodations. The property also features an excellent system of roads, is accessible via paved highway from Reno or Sacramento, has abundant water and timber available for mining purposes, and has PG&E power available on-site.

See Ruby Mine at the North Bay website at http://www.northbayresources.com/ruby/.

$7.5 million for North Bay’s Ruby Gold Project in Sierra County, California, through the EB-5 Program

$7.5 million in funding for the Ruby project is expected to be provided through a federal program known as EB-5, which is intended to help stimulate the US economy by creating new jobs in rural areas and areas of high unemployment in the US.

Northern California Regional Center, LLC , a USCIS-designated Regional Center under the federal EB-5 Program, has agreed to expand its scope to include mining projects, and together with ACG Consulting, LLC  has agreed to sponsor North Bay’s application to obtain $7.5 million for North Bay’s Ruby Gold Project in Sierra County, California, through the EB-5 Program.

Subsequently, in January 2011, NCRC filed an amendment with USCIS requesting formal approval for an expansion of it designated area, including the Ruby Gold Project. The Company anticipates that formal approval by USCIS for the Ruby Gold Project under the federal EB-5 Program will be received upon completion of the USCIS review process.

In the interim, North Bay is moving forward by using their $5 million equity credit line as a bridge until the EB-5 funds are received.

Other US Operations

Elsewhere in the US, the Company is presently reviewing several potential acquisitions and joint-ventures of near-term producing properties. Most of these have been identified by our consulting geologist, Theodore DeMatties, P.Geo, as well as other sources, and site visits by management are now being scheduled.

The resources of these properties range from several hundred thousand to several million ounces of gold. Due diligence continues, and while there is no assurance that suitable financial terms can be agreed to, the Company expects that at least one or more new acquisitions will be announced before the Ruby Mine is in full operation.

Canadian Operations

As of March 31, 2011 and March 31, 2010, cash gains from claim sales totaled $96,000 and $5,000, respectively and as per GAAP, been classified as “Other Income”.

As of March 31, 2011, the Company’s joint-ventures were underway on:
(a) Fawn property in central British Columbia with Silver Quest Resources Ltd, and
(b)  Coronation Gold property in southeastern British Columbia with Lincoln Resources Inc.

Brian Simmons, P.Geo has been engaged as the Qualified Person as defined by National Instrument 43-101 to assess the Company’s Zeballos Gold property on Vancouver Island, British Columbia. Work has begun as of May 2, 2011, and the Company expects to receive a NI 43-101 Technical Report on the Zeballos Gold project soon after completion. The report will be post it to the Company’s website.

In the coming months, the Company expects to commission NI 43-101 reports on several more BC properties, including: Tulameen Platinum, Crescent REE, Pine River Vanadium, Cherry Gold, and Bouleau Creek Gold.

EB-5 Funding

The Company is waiting for approval by  the United States Citizenship and Immigration Services for the expansion of the Northern California Regional Center to include mining projects in Sierra County, California. Once approved, the Ruby Gold Project will then be a pre-approved EB-5 investment vehicle that can legally accept funds from EB-5 investors overseas under the EB-5 guidelines, and through the auspices of Northern California Regional Center. The

The funds come from overseas investors who are waiting to secure a visa to immigrate to the US by investing in a United States Citizenship and Immigration Services -approved EB-5 project that can create new jobs, which the Ruby Mine will be. The Ruby Mine is within an EB-5 defined Targeted Employment Area and is therefore fully compliant with EB-5 guidelines.

The Company believes that funding for the project is virtually certain once United States Citizenship and Immigration Services gives the green light to allow the project to be qualified for EB-5 investment purposes. Given the relatively long timeline of the United States Citizenship and Immigration Services review process that has resulted in a shortage of qualified EB-5 projects, and the number of EB-5 visa applicants waiting for qualified United States Citizenship and Immigration Services -approved projects to invest in, there is presently an extreme supply/demand imbalance that the Ruby Gold Project should help to alleviate.

The EB-5 Program was authorized by the US Congress under the Immigration and Nationality Act of 1990, with the intent to help stimulate the US economy by creating new jobs in rural areas and areas of high unemployment.

The term “EB-5″ is an acronym for “the fifth employment based visa preference category.” As it implies, the source of the investment capital comes from foreign investors who wish to legally immigrate to the US by investing a minimum of $500,000 in a commercial enterprise that will benefit the US economy and create at least 10 full-time jobs in the US.

The program is administered by the United States Citizenship and Immigration Services (“USCIS”), as provided under Section 610 of Public Law 102-395. Since its inception in 1990, the EB-5 Program has been the conduit through which over $1 billion has been invested by foreign nationals in US enterprises to create jobs throughout the US economy.

ACG Consulting to Create New EB-5 Regional Centers

The Company, through its recently-announced operating unit North Bay Capital Group, is working with ACG Consulting, LLC, to create new EB-5 Regional Centers in Nevada, Arizona, Montana, Idaho, and Oregon, to provide EB-5 funding for additional projects.

ACG Consulting, LLC is an affiliate of Acer Capital Group, a global holding company of Private Equity foreign and domestic funds in the business of deploying capital. ACG specializes in facilitating employment-based funding through the EB-5 Program, and has successfully established EB-5 Regional Centers throughout the US, and across a diverse range of industry sectors. ACG website at http://www.acgcompanies.com

Northern California Regional Center, LLC is a USCIS-designated regional center under the EB-5 Immigrant Investor Pilot Program. The EB-5 Program was created by the United States Congress in 1990 through passage of the Immigration and Nationality Act.

In 1993, Congress created the Pilot Program to stimulate immigration under the EB-5 category. The Pilot Program allows individuals from around the world to attain United States citizenship through investment in U.S. businesses and creation of U.S. jobs.

Both programs are currently being administered by the United States Citizenship and Immigration Services (“USCIS”), an agency of the Department of Homeland Security. Northern California Regional Center was designated as an approved regional center by the USCIS on April 22, 2010.

secured $5 Million in financing under an equity line of credit with Tangiers

S-1 Registration Statement for First Tranche of $5M Equity Credit Line

NBRI has filed a Form S-1 registration statement with the Securities and Exchange Commission (“SEC”) to register the first tranche of its $5M equity credit line with Tangiers Investors, LP (“Tangiers”).

As previously announced on October 21, 2009, the Company has secured $5 Million in financing under an equity line of credit with Tangiers. A summary of the terms of the agreement provides that:

  • North Bay has the right, but not the obligation, to draw down on the equity line of credit by selling to Tangiers shares of the Company’s common stock for a total purchase price of up to $5 Million.
  • Tangiers will pay the Company 90% of the lowest volume weighted average price of the Company’s common stock during the five days immediately following the notice date (the “Pricing Period”) as quoted by Bloomberg, LP on the Over-the-Counter Bulletin Board (“OTCBB”). This will amount to a 10% discount to the prevailing market price of NBRI during the Pricing Period.
  • Draws are limited to $100,000 per 10 consecutive trading days after the advance notice is provided to Tangiers.
  • Tangiers’ obligation to purchase shares of the Company’s common stock under the Securities Purchase Agreement is subject to certain conditions, including the Company obtaining an effective registration statement for shares of the Company’s common stock to be sold under the Securities Purchase Agreement.

The newly-filed Form S-1 seeks to register up to of 19,726,822 shares of common stock that may be issued pursuant to the Securities Purchase Agreement (“SPA”) with Tangiers.

Management

Perry Leopold – President & CEO, Chairman

Perry Leopold, the Company’s President, CEO, and Chairman of the Board, has led a number of successful enterprises over the past 25 years in a diverse number of fields, ranging from the arts and technology to finance and natural resources. In February 2006, Mr. Leopold was engaged as CEO to engineer the company’s total corporate restructuring and lead its re-emergence as the natural resources company formerly known as Enterayon, Inc.   Mr. Leopold subsequently designed the company’s generative business model and incorporated state-of-the-art technology to assist in cost-efficient acquisition targeting, which has resulted in over 50 acquisitions of high-quality mining properties throughout British Columbia. Educated at the University of Pennsylvania, Mr. Leopold is also the founder and President of Speebo Inc., a privately-owned exploration and development company. In addition, he is currently serving as President of Circular Logic, Inc, a registered Commodity Trading Advisor (CTA) and Commodity Pool Operator (CPO) firm specializing in commodity trading system development.

Fred Michini – Director

Mr. Michini is a tax, financial, management accounting and litigation support specialist, and has extensive previous experience serving as the Chief Financial Officer of a variety of public and private companies, including Speebo Inc., a private exploration and development company currently controlled by North Bay’s CEO. Mr. Michini is also a Certified Public Accountant, has been Partner and Managing Partner of two regional accounting firms, has served as an auditor for the U.S. General Accounting Office, and is a former Board Member of the Central Montgomery County Chamber of Commerce. Mr. Michini earned his B.S. from LaSalle University and his MBA from Temple University.

Consultants

C. Gary Clifton, P.Geo

Mr. Clifton holds degrees in Geology and Geochemistry from Macquarie University in Sydney, Australia, with post-graduate studies in Geochemistry at UC Berkeley and Oregon State University. As a Registered Professional Geologist, Mr. Clifton has almost 40 years of experience with several major mining and petroleum companies, and as an independent consultant in mining exploration and exploration management, mineral property evaluation, and mining geology. He has conducted and managed exploration and evaluation programs for a wide variety of mineral commodities in the United States, Australia, and the Middle East. Mr. Clifton is currently President of Western Resource Group LLC, and is a Qualified Person as defined by National Instrument 43-101.

Theodore A. DeMatties, P.Geo

Mr. DeMatties holds B.S. and M.A. degrees in Geology from the State University of New York in Oneonta, and has also done graduate work in Geology at Oregon State University. As a Registered Professional Geologist, Mr. DeMatties is a seasoned exploration geologist with over 34 years of experience in the US and Canada, and is a Qualified Person as defined by National Instrument 43-101. Recent projects include managing an advanced multimillion dollar copper-nickel-PGM project in northeastern Minnesota, consulting on several gold, iron-oxide-copper-gold (IOCG) properties in Nevada, and on volcanogenic massive sulfide (VMS) properties in North America. Prior to these engagements, he was a consultant to WMC Exploration and Falconbridge U.S. on copper-nickel-PGM exploration programs in the upper Midwest, and INCO for an iron oxide-copper-gold (IOCG) project in the western U.S.

Contact:

Perry Leopold, CEO
North Bay Resources Inc.
2120 Bethel Road
Lansdale, PA , 19446
Website: http://www.northbayresources.com
Phone: 215-661-1100
Forward Looking Statement: This release may contain certain forward-looking statements within the meaning of Section 27A of the Securities and Exchange Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainties. Although North Bay Resources Inc. believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any assumption could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion should not be regarded as a representation by North Bay Resources Inc. or any other person that the objective and plans of North Bay Resources Inc. will be achieved.

Cautionary Note to U.S. Investors -The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on our website (or press releases), such as “measured,” “indicated,” and “inferred” “resources,” which the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form S-1 and subsequent Form 10-K.

 

NBRI Disclosure: Pentony Enterprises LLC entered into an investor relations consulting and market awareness contract with NBRI. We hold not shares and will not be receiving any shares. To avoid all potential conflicts of interest, we never sell shares into the open market during an active market awareness or investor relations program. This means that as we release new information about a particular client company either on our site or otherwise authored by us, you can be confident we are not selling shares at the same time. Pentony Enterprises is not a registered investment adviser or a broker/dealer. Pentony Enterprises LLC makes no recommendation that the purchase of securities of companies profiled in this web site is suitable or advisable for any person, or that an investment in such securities will be profitable. The Company will compensate us a total of eight thousand dollars for coverage.  In general, given the nature of the companies profiled and the lack of an active trading market for their securities, investing in such securities is highly speculative and carries a high degree of risk. Pentony Enterprises LLC – 1601 Berwick Drive – McKinney, Texas 75070 – (469) 252-3031.

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