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CLIFTON MINING COMPANY 80 West Canyon Crest Road · Alpine, UT 84004 Phone (801) 756-1414 · Fax (801) 756-5454
December 2009 Dear Clifton Shareholders: Greetings from the Clifton Mining Company home office! Dr. Friedman and I felt it would be appropriate to provide you with some current information. First, for those who have inquired, the 2008 financial statements are available on Clifton Mining’s website by selecting the Financial tab then select Statements or use the following link: As you may be aware, for the past six years Clifton Mining was under an operational contract with Dumont Nickel Inc. of Canada. During that time, Dumont spent in excess of $5 million drilling and developing ore deposits on the property, including extensive mapping, property evaluation and assay delineation. In July 2009, Clifton Mining was able to structure a buyout of the vast majority of Dumont’s interests and the other owner’s interests in the Kiewit properties—which Dumont had obtained through the aforementioned investment of time, capital and other resources—for approximately $305,000. (A total net smelter royalty of one percent (1%) will be paid on the ore mined from the Kiewit properties and one half of one percent (½%) net smelter royalty on certain of the other claims acquired.) In summary, Clifton Mining’s acquisitions in July 2009 included the following: · 173 BLM Mining Claims These transactions have now put Clifton Mining in a position of owning or controlling the areas believed by the company to be of the most significant value with current land holdings totaling approximately 13,100 acres of property in the Clifton Mining District. Note that accounting procedures do not recognize the value of any mineralized material on the Clifton Mining’s properties. Yet reports of independent geologists on the silver shear zones calculated a measured and indicated resource of gold, silver and lead with a gross value of $180 million at current prices. Subsequent reports on the Kiewit area have estimated a gold resource of about $30 million. None of this is reflected on the Clifton Mining’s balance sheet. All of these activities seem to confirm an observation of the Clifton properties made by Canadian mining expert Charlie Pitcher of Mining House. Speaking of the rich array of gold, silver, copper, tungsten and a plethora of other minerals, he said, “This property is a veritable jewel box of minerals.” Many former mines on the property have in the past been unprofitable due to the formerly low price of gold and other metals. Now the high (and rising) prices of mineral resources are providing greater opportunities for development. Some of this activity is already underway. Clifton recently signed a 20 year agreement with Desert Hawk Gold Corp., led by an experienced team, to explore, evaluate, develop, and mine mineral resources from the company’s properties. Currently, Desert Hawk has plans for a three-pronged approach: · Upgrading and opening the mill in Gold Hill for operations As part of its contract, Desert Hawk, a well-funded private company, paid the company $250,000 and will issue 500,000 Desert Hawk common shares to the company (equal to approximately 10 percent of outstanding shares of Desert Hawk). Clifton will receive a 4% net smelter return royalty (NSR) (4% of the sales, minus relatively small smelter fees) on base metals produced from the property and a graduated NSR on the gold and silver. At current prices the NSR would be 8% on both the gold and the silver. The maximum NSR would be 15%, when the price of gold exceeds $1,500 and the price of silver exceeds $25. Desert Hawk has determined that it can obtain a shorter return on its efforts by mining an additional property in conjunction with its efforts in Clifton, which continue. This action will also benefit Clifton in a shorter term. So, the state of Utah in Nov 12th granted Desert Hawk Gold Corp. a permit to mine the Yellow Hammer mine file #S0450076 owned by the Moeller Family Trust as assigned to Desert Hawk. Desert Hawk as the operator of the Yellow Hammer mine will process at Clifton’s facility at Goldhill. Clifton will be compensated for the milling and/or the net smelter royalty by Desert Hawk. This will be a copper/gold open pit. The permit allows 200,000 tons of material to be removed. It will then be trucked 5 miles to the Cactus mill at Gold Hill (owned by Clifton Mining). The permit for the Cactus Mill has not been approved yet. Some of the greatest challenges mining companies face traditionally involve environmental impact studies and their implications. In this respect, Clifton and its shareholders are fortunate that Dumont filed an environmental impact study that has been approved by the appropriate government agencies, subject to an addendum from Desert Hawk on proposed operations. We are truly fortunate that this environmental impact hurdle has already been essentially cleared. In addition to all of the good news mentioned above, we are also delighted to share with you some key information about the progress of American Biotech Labs, LLC (ABL) which is owned by American Silver LLC, in which Clifton is a major shareholder. This month, ABL received its second clearance from the U.S. Food and Drug Administration for a prescription antibacterial silver wound dressing gel, which in laboratory tests has been shown to inhibit the growth of microorganisms such as: Staphylococcus aureus, Pseudomonas aeruginosa, Escherichia coli, antibiotic resistant strains, MRSA and VRE as well as fungi such as Candida albicans,and Aspergillus niger. This clearance has considerable global significance and will add to ABL’s arsenal of successful products. We hope you will agree with us that there is good reason for optimism about Clifton Mining and its future. Best regards, /s/ Bill Moeller /s/ Ken Friedman |
