TRAVERTINE

Travertine

A large world-class quality travertine deposit is located in Mesa del Oro, New Mexico (over 1.2 Billion Tons!) This may be the largest of its kind in the country.

NZ now has Federal claims which complement its fee lands containing the travertine limestone. Assessment for claim year September 1991 to September 1992 consisted of drilling and blasting out a sample bench. There are confirming drill holes on every major section of claimed ground.

Chemical analyses have been run from cores, cutting and hand samples by many different investigators. There is a striking uniformity to all these analyses, and all indicate high calcium, or chemical grade, limestone.

Common variety limestones occur either in the subsurface or at the surface on all of NZ's checkerboard tracts. Economically important occurrences are limited to New Mexico - particularly Cibola County.

The Madera (Pennsylvanian Age) and San Andres (Permian Age) marine limestones crop out across NZ's checkerboard minerals in Valencia County, New Mexico. They are a target for oil exploration but not limestone production. A massive travertine limestone (Cenozoic Age) is found at Mesa del Oro in Cibola County, New Mexico. This limestone was reprecipitated from the older limestones, and it is of high chemical purity. Analyses consistently show over 95% CaCO3 content, with relatively low magnesium and other impurities.

Limestone is the basic constituent of cement and lime. It is also useful to acid neutralization, paper processing, and more recently, flue gas desulphurization. In addition to such chemical uses, limestone may be utilized as road metal.

In general, commercial limestone production is highly sensitive to available transportation facilities and proximity to consumption. The Cibola County travertine is the most likely economic deposit from NZ's checkerboard mineral estate.

In the fall of 1981, NZ granted Sunbelt, a wholly owned subsidiary of Public Service Company of New Mexico, a one year option to lease the entire deposit. With the claims, this came to some 8,800 acres. Sunbelt's interest was twofold: 1) the planned Four Corners Station, later called Dineh Power Plant, was to use limestone scrubbing; 2) the utility was diversifying into real estate, mining, venture capital, and other business area.

The following text is an excerpt from the Sunbelt Mining Company, Inc. Mesa del Oro Limestone Project, Reserve Determination report.

"The Mesa del Oro limestone deposit was laid down over a Chinle erosional peneplain of red shale and siltstone. During deposition, localized erosional and weathering cycles created diverse uncorrelatable depositional sequences which are apparent in the limestone stratigraphic drill hole sections. Subsequently dissolving by circulating ground water has formed cavities, which is an indication that limestone has been completely dissolved or recrystallized locally. Also, large

limestone landslide blocks have slumped down along the mesa slopes, due to the unstable, easily erodible nature of underlying calcium clay zones.

Several complicating factors became apparent in trying to arrive at a limestone reserve determination. The major difficulty can be attributed to the varied and irregular configuration of the base of the limestone deposit. The limited number of Sunbelt drill holes and their wide spacing did not allow a valid assessment of reserves based solely on the newly collected data. Therefore, it was decided that computation of reserves would utilize data previously compiled by Intrasearch Corporation of Denver, Colorado. This data included a structure contour map of the base of the limestone deposit, which was then confirmed by Sunbelt's drill hole data. The information was transferred onto Sunbelt's and modified to include 10 foot contour intervals interpolated between the original 40 foot contour spacings. This structure map formed the base from which the limestone isopach map was developed. On the isopach map, every 20 foot contour interval for each section (tract block) was then planimetered to obtain the number of acres of limestone within each contour interval. Using the interval thickness and an assumed value of 150 lbs/cu.ft. (per Fuller Company) as an average weight for travertine, the gross tonnage was computed for each track block.

It should be noted that a limestone isopach map was not constructed for the Northern tract. Because of limited amount of data (one drill hole), the small area extent of the property, and the less complicated nature of the surface geology of the travertine deposit in this area, construction of an isopach map is not appropriate at this time.

Overburden or waste was subtracted from the gross tonnage in each tract block. The thickness of this in-place overburden was determined by averaging the overburden encountered in the drill holes located in each block. The wide spacing between each drill hole limits the overall accuracy of this method. However, the deepest overburden zone encountered in the drilling was only 15 feet and, therefore, it is assumed that any inaccuracies inherent in the overburden computations will not greatly alter the overall tonnage figures. During the drilling of hole #157 in Section 34, 4.2 feet of basalt was encountered just below 10.1 feet of overburden. This basalt is interpreted as a surface flow and therefore has been included with overburden for calculation purposes.

In figuring interburden zones, widely spaced Sunbelt drill holes were argillaceous sandstone, clay, sandy clay, pebble conglomerate and some basalt were combined and totaled for each drill hole. A ratio was then computed for each hole by comparing total interburden with combines limestone and interburden excluding overburden. Each ratio was then multiplied by the gross tonnage to obtain a final tonnage exclusive of overburden and interburden. This method was used only on federal land staked by Sunbelt. On fee land owned by NZ, a dilution ratio of 1:3 was chosen to approximate the average of all the dilution ratios previously computed for the Sunbelt claim group. This ratio was used to compute all the NZ fee land reserves.

In Summary, Sunbelt Mining Company, Inc., has analyzed the viability of certain limestone leases presented in the lease option agreement dated September 15, 1981 (Exhibit I) with NZ. Sunbelt conducted a field exploration program in May and July of 1982 completing 10 drill holes. Quality samples were obtained from the limestone core in drill hole number 50. Drilling penetrated 206.4" of solid, massive limestone. Four core samples were selected at intervals demonstrating greatest visual and textural variability. These four samples were sent to Fuller Company for analyses on May 20, 1982. Fuller crushed and split each sample and returned to the unused half to Sunbelt. The split from Sample #2 was sent to Hazen Research, Inc. and tested to confirm procedures and results obtained from Fuller."

As dimension stone, this deposit would have a retail value of over $2 Trillion. The calcium carbonate material is also used for cement, lime, road-base stabilizer, and flue gas scrubber material for coal-fired power plants (it removes the sulfur that causes acid-rain).

NZ is concluding their homework on this deposit and have resolved the following: 1. Travertine is mined Mexico and Turkey at much lower labor costs; 2. The Italians started selling high technology rock fabrication equipment to these countries to automate their quarries and fabrication plants; 3. The market in the US is mostly time sensitive custom stone fabrication.

NZ toured one of the largest plants in Belen, New Mexico on October 2, 2003. The conclusion is that mining the travertine for industrial purposes is a much larger opportunity than a dimension stone facility. However, it seems that a dimension stone quarry could produce an income of $250,000 per year profit if done carefully and maintained at a smaller scale. NZ has a lessee that pays $.50 per ton or 5% royalty whichever is greater. If the deposit is used and depleted for a lower value industrial application it would still payout over $200 Million.

In February 2004, NZ enlisted Pincock, Allen & Holt, mineral experts to evaluate and review the travertine mineral files. Their conclusions are summarized in this report.

NZ Travertine, LLC stake claims

(click to enlarge)

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