Geological & Economic
Evaluation Report

1. Summary
2. Introduction
3. Uses
4. Market
5. Definition
6. Geology
7. Purity
8. Ore Reserves
9. Prices
10. Conclusions

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At the request of Washington Silica, Inc. (WSI), this report contains the results of geological quantitative and qualitative analysis for above ground minable silica reserves. The evaluated WSI lode claim is located in Millard Count, Utah.

The completed analysis reveals a unique silica deposit of extremely high purity, 99.9+% silica and .015% iron and .001% potassic feldspar. Above ground total reserves are estimated at 350,000,000 tons, using a 50% confidence factor reduces the total deposit tonnage to 175,000,000 tons. High industrial grade silica costs $43.00 - $410.00 per ton. The U.S. Department of Interior Bureau of Mines estimates low grade silica at conservative figures establishes the WSI lode claim value at $3,325.000,000.00+.

At the request of Washington Silica, Inc. (WSI), a geological evaluation study was initiated to determine the quality and quantity of the minable silica reserves of the WSI lode claim groups, situated in Sections 14, 20, 21, 22, 23, 26.27, 28, & 29, T22S, R14W, SLBM, and Sections 3 & 10, T23S, R15W, SLBM, Millard County, Utah. Millard County is located approximately one hundred-twenty five miles southwest of Salt Lake City.  Access to the mining area is by graded roads. Union Pacific's main northeast-southwest line is located 25 miles west of the mine site.

The geological evaluation study consisted of on site sampling of the sandstone/orthoquartzite deposits (See Appendix I).  Minable silica reserve tonnage's were determined by on-site measurements, geologic plats, and gritted three-dimensional computer plots using three-dimensional integration to compute the net volume of a solid defined by an upper and lower surface (See Appendix II).

Only readily accessible surface deposits were considered in the minable reserves. No open pit type excavations were considered, which greatly reduces the cost of mining and the disturbance to the environment.  With a realistic mining plan, future rehabilitation of the mined area should be minimal or unnecessary.

Silica sand is used in the production of flat glass, container glass, specialty glass and windshields, as foundry sand, in ceramics and refractories, as fillers and extenders in the paint, plastic and sealant industries, in fiberglass and specialty fabrics and abrasive cleansers.

At present, no significant producer of high purity ground silica exists in the 11 western states. High purity ground silica and high quality foundry and flat glass sands currently lies close to 2,000 miles east of the west coast markets.

All ground high purity silica used in the 11 western states for manufacturing of fiberglass, ceramics, fillers and extenders is purchased from the Midwest and southern production facilities.

A similar situation exists as to high quality foundry silica sand.  Ninety one percent (91%) of the high quality foundry sands are produced in the Midwest and southern regions.

The industrial silica sand market is broadly divided into three segments:

1)    Ungrounded silica sands of lower purity and/or angular particle size, not suitable for use in manufacturing processes requiring high purity and rigid particle size and shape specifications (e.g. glass container industry, construction industry, etc.).

2)    Ungrounded high purity and/or high quality silica, -40 + 140 mesh, where uniform grain size and shape and chemical consistency are required (e.g. foundry and flat glass industries).

3)    Ground silica, -200 to sub-micron size of high purity and quality (e.g. paint fillers and extenders, fiberglass, ceramics and refractories, fused quartz, sealant, specialty glass, plastics and Sheet Molding Compound (SMC) industries).

The minable deposit is Eureka Quartzite, which is a combination of orthoquartzite and quartz sandstone, vitreous in part, white to light-gray, medium to fine-grained; weather reddish brown; spherical pockholes, about one-half inch in diameter, are numerous and characteristic of Eureka Quartzite.  Forms light-colored cliffs contrasting conspicuously with dark dolomites above. Upper and lower few feet are gradational dolomite sandstone.  The stratigraphic column within the south-central Utah region indicated a thickness of 540 feet, however, within the WSI claim groups measured thickness average 150 feet.

Orthoquartzite, by definition taken from the Glossary of Geology and Related Sciences, published by the American Geological Institute, is a classic sedimentary rock composed of silica-cemented quartz sand.  The cement is commonly deposited in crystallographic continuity with the quart of the worn grains.

Krynine (After Krynine, GSA Bulletin, vol. 52, pp. 1915 - 1916, 1941) describes first-cycle orthoquartzites", which are the products of intense chemical decay and destruction of all original materials except quartz, and "second-cycle orthoquartzites, which are the product of reworking the first cycle type.

I feel this explains the uniqueness of the WSI silica deposits as to its high purity of 99+% silica and low iron content, which makes this silica a most desired material for high purity glass manufacturing, and other commercial requirements for high purity silica.

The exceptional purity of the minable silica reserves of the WSI lode Eureka quartz sandstone/orthoquartzite formation has been tested and documented by WSI and independently by U.S. Borax and N.A. Degerstrom, Inc. Labs.

Over three hundred samples were obtained and assayed by U.S. Borax.  These materials were crushed, milled and screened and passed through a dry-cell, wet, electro-magnetic separator and produced a product that averaged 99.8 percent silica.

Sample preparation by WSI, used a process similar to that employed by U.S. Borax but with a stronger magnet which yielded a product averaging 99.9 percent silica.  In an attempt to duplicate expected milling processes, crushed material was passed over rare-earth magnets.  Assays indicated that because of their strength, not only was the tramp iron removed but also much of the magnetite that occurs as inclusions.  The result exceed specifications of the foundry, glass, extender and filter industries.  In fact, the quality is so high that the material could be used for specialty glasses and glazes and as starter material for silica metal products.

Based on over 200 samples taken throughout our WSI claim group, chemical analysis averaged the following:

Chemical analyses of the Eureka quartz sandstone/orthoquartzite formation conducted by U.S. Borax, are averaged as follow:

"Point-count' work conducted by U.S. Borax, on silica material from the Eureka formation, indicated the "grades as high as 99.99+ percent silica should be expected in the glass fraction with minor losses from the 150 fraction and rejection of some course clusters."  Therefore, it is expected that essentially any grade of purity required by user or supplier can be met. Chemical analyses of the Eureka quartz sandstone/orthoquartzite formation conducted by N.A. Degerstrom, Inc., (See Appendix IV) are averaged as follows:

The total silica reserves have been estimated for the WSI deposit as 350,000,000 tons.  Using a confidence factor of 50% gives the total reserves as 175,000,000 tons silica. An adjustment was made to include only the tonnage's that could be safely mined with the least disturbance to the environment.

The reserves are a compilation of five (5) minable areas within the claim groups, and the estimates are as follows:

The value of U.S. produced industrial grade silica sand varies significantly according to its chemical and physical properties.  Nationally, industrial silica sand used as fillers for rubber, paint and putty, etc., have the highest average price of $70.00 per ton. Silica sand used in ceramics averaged $43.00 per ton followed by foundry sand at $41.00.  The average price for fiberglass is $39.00.

A developing market, small at the present time but of key importance, is micronized silica for use as fillers and extenders in paint, adhesive and sealant, silicon rubber and electra-deposition painting.  High purity silica from 5 micron to sub-micron sizes demand a premium price. U.S. Silica and Ogeiby Norton plants in the Midwest produce micronized silica in the price range of $175.00 to $250.00 per ton, FOB plant. Unimin Corporation's North Carolina plant sells this product for $410.00 per ton, FOB Plant.

The U.S. Department of the Interior, Bureau of Mines, estimates low grade silica at $19.00 per ton. For high degree of confidence, this is the figure used to price the WSI lode claim.

The WSI lode claim group has excellent reserves of high purity (99+%) silica, which borders on uniqueness.

Minable reserves are in the range of 175 million tons. The criteria set for computing the minable reserves was that only readily accessible surface deposits be included, and excluded any open pit type excavations.

Based upon the Bureau of Mines cost of $19.00 per ton places the value of the WSI lode claim conservatively at $3,325,000,000.00.

nelson-intl@nelson-int.com