Why Bramet wants to sell Leviathan Gold Mine

February 14, 2009

Leviathan Gold Mine, situated in Yavapai County, ranks first among the gold producing counties, having produced over 3,500,000 ounces of lode gold and over 300,000 ounces of placer gold. The Leviathan Gold Mine is virtually untouched with a documented profitable track record is up for sale.

George Bramet, who along with his brother Timothy, who own have put up a sale notice for the 145-year old mine that stopped production way back in 1917.

The Bramet family obtained the property in the 1960's. In 1917, the mining company working the mine showed Net earnings of $228,500.00 for that year in gold production.

In 1917, gold was valued at $18.99 per ounce. If you calculate that figure based on where gold is today it would equal $10,829,383.89!

Commodity Online Editor Sreekumar Raghavan interviewed George Bramet on why he is selling the mine and clear the inconsistencies on the information available in his website regarding the mine.

The history of Leviathan Gold Mine looks a bit vague and confusing from what appears in the web site. Could you throw some light on how Dennis May got into the picture and how it went out of the hands of the so called criminal Charles P Stanton?
Dennis May was credited with discovering and staking claim of the Leviathan property. Dennis May has been credited with several major mining discoveries such as the historic Congress Gold Mine just miles from the Leviathan. It’s believed that Dennis May was engaged in several ventures during the discovery of the Leviathan Gold Mine and didn’t put up much a fight with Stanton due to his recent success with other successful mines. In addition, Stanton was a notorious killer and it would have been in Dennis May’s best interest to let it go in exchange for his life.

How much gold (quantity) was mined for Leviathan so far?
The last year of gold production was in 1917 and produced over 12,000 ounces of gold. In the 1970’s there were 2 groups that set up an agreement with Grace Downer (my grandmother) to do some surface mining, which in not indicative of what’s in the shaft. Unfortunately each time, her experience was very negative due to theft and poor business practices on behalf of the individuals doing the surface mining. In 1977 a geologist was hired (Mieritz) to contradict some of the false reporting done by Defty, one of the surface miners who was stealing. Beyond this, there was been no mining done within the shaft since 1917. Most Jr. mining companies and small groups do not have the financial backing nor own the equipment necessary to conduct open pit or underground mining. The major reason for the halt of production in 1917 was due to the unusually high water tables. Water rights were taken from us in the 1970’s due to the growing community surrounding the area. Water tables are now vastly lower in the area.

How much could be the estimated potential now since the last assay report is more than 20 years old and no mining took place since 1917?
The one issue that I’ve run into with assay reports for the property are that they are generally taken from surface rocks at random. The problem is that most of the tailings piles from previous surface mining have been leached long ago. This now leaves random rocks to pick from. It’s really a crap shoot. In order for us to get an accurate sample, it would require a process call core sampling. To obtain these types of samples from within the shaft would run upwards of $100K -$200K in equipment cost, let alone the bag log for the equipment rental. The next closest option is to pay a geologist to repel into the shaft and chip samples from the wall. This is also very expensive and many geologists will not conduct this type of sampling. The geology of the rock has not changed. The report from 1917 is accurate and filed with the Arizona Bureau of Mines and Minerals. The mine itself is approximately 300 feet vertical which a baby in comparison to surrounding producing mines. The reason the mine has not gone back into production is simple. It’s passed from family members with little or no mining experience for decades until I took the initiative to organize and read all of the material on the mine. I have a background in business and saw that we had a viable product here. Unfortunately, my background is in unrelated fields as well otherwise I would be more interested in seeking funding for production instead.

ALSO READ: Untapped Leviathan Gold Mine is up for sale

Don’t you think that a mine left unexplored could actually come up with technical problems when mining is again resumed after sale of 50% assets?
I believe that if we were able to go into a Joint Venture, selling 50% of the property that we would benefit virtually the same. In this circumstance we would be privy to all of the production data/documentation accumulated. In this, the reports would allow us to option the remaining 50% along with all reporting which we could not previously afford.

From what appears in the site, George Bramet Sr was in possession of this site from 1960 which he received for accounting services done to the prior owners of the assets. But why is that no effort was done to mine out the assets all these years? (My grandfather looked at the property as an asset to pass to his sons George and Timothy. He was the CEO of a major aeronautics corporation and a very busy man. Once again, in an unrelated field.

How is it that you have arrived at 80% return on investment and what kind of investor are you targeting at. Possibly a gold mining company with technical know-how suitable to tap the potential of this project?
My estimates are based on a combination of the proven production in 1917 and where gold is today and rising. After speaking with several mining groups, engineers and geologists, I vouch for figures of $200 - $400 per ounce in overhead for production. This number includes operational costs, transportation, man power, etc. With gold at $915 per ounce today minus this overhead cost per ounce, that is where I came up with my estimates. Also, keep in mind, depending on the buyer that may already own the required equipment, etc. I’ve classified 3 types of potential buyers. First is the speculator. This is a buyer that may not have extensive mining experience, but wants to own a mine or jump into a new sector. Second are the Jr. Mining companies. Typically they have several backers for each venture undertaken and usually lean towards Joint Venture agreements. Third, the global mining companies which own the equipment and are currently conducting several mining operations. I’ve found that many of the global companies will not entertain any offers of less than 100 acres, which we now qualify for with our 140+ acre sale.

On what terms are you planning to sell 50% stake in the project and could you specify why it should prove attractive to a prospective buyer?
With a Joint Venture offer we’ll receive 50% with an agreement to develop the property by the buyer, which will be responsible to fund and/or raise the operational capital for production. Although we will retain 50% ownership we may negotiate a smaller return on production due to the overhead costs being absorbed by our JV partner. The enticing factor for the JV partners are the returns they will see. Many industry professionals speculate gold rising well about $1000 an ounce. We’re seeing this now. A smart buyer would invest as soon as possible as to benefit from the increased profit majors onset by the increase in the cost of gold per ounce.

Media reports say that although gold prices are quite high gold mining stocks are bearish. Therefore, do you expect good valuation for your gold mine, in the present down turn scenario?
I don’t. The reason is that gold trends historically show growth during economic decline.

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