The Hercules

The Hercules gold project has a history dating back nearly 150 years, and has been estimated to have produced 5,000 ounces of gold and 20,000 ounces of silver from high-grade veins, historically (source: Pioneer Mining Corp., 1992).

The Hercules is located in southern Lyon County, approximately 40 km southwest of Reno, and 11 km outside of Dayton. The Hercules is 16 km from the Comstock Lode and 24 km from the Talapoosa Mine. The property consists of 40 mineral claims covering approximately 800 acres of land. Regionally, the Hercules is located within the Walker Lane, a structural belt extending more than 700 kilometers through western Nevada and into California, which hosts several important gold and precious metals deposits such as Comstock, Rawhide, Aurora, Paradise Peak, Bullfrog, Goldfield, and Tonopah.

Exploration conducted by others to date, including Pioneer Mining Corporation and Phelps Dodge Corporation, has led management of American Goldfields to conclude that the Hercules contains significant concentrations of gold. With more than $2 million USD in exploration expenditures and 197 drill holes totaling more than 44,000 feet, the majority of the drilling to date has been focused on shallow open-pit heap-leachable gold mineralization. Some of the recent drilling increased the known resource area, and defined new areas of gold and silver mineralization. The current drill program is offsetting gold mineralization within the new discoveries. Drilling is progressing with six holes completed.

According to reserves studies done by Pioneer Mining Corporation and Horizon Gold, the Hercules contains a resource of more than 217,000 ounces of gold and 1,571,000 ounces of silver. All of the resources remain open along strike and at depth. In his annual compilation of major precious-metals deposits of Nevada, Tingley (2000) quotes a resource for the Hercules of 259,329 ounces of gold and 1,956,511 ounces silver. The accuracy or validity of these estimates has not been reviewed by American Goldfields.

Management considers the Hercules to be an epithermal gold-silver mineralized system with direct analogies to the historic Comstock Lode deposit. The historic Comstock Lode deposits of Virginia City consist of a series of fault controlled vein systems which, between the 1860's and 1880's, produced a significant quantity of rich gold-silver ore. Although some mining occurred near-surface, the bulk of the gold and silver mined at Comstock occurred below 1,200 feet. The Comstock bonanza-grade mineralization averaged 2.0 ounces per ton gold and 50 ounces per ton silver.

With encouraging results on the previous two drilling programs, further testing of recently discovered, near surface gold mineralized zones throughout the property is being pursued. The current drilling is targeting previously untested, disseminated gold zones under reasonably shallow cover as well as testing nearby vein structures for high grade gold at depth.

Covering nearly 390 acres in the southern Lander County area of central Nevada, the Gilman Gold Property is a structurally hosted gold mineralized system consisting of 19 unpatented mineral claims.

Situated to the north of the Tonopah District, the Gilman Gold Property is 50 km north of the Round Mountain discovery, a deposit which has produced over 5 million ounces of gold and 3 million ounces of silver since it was first discovered in 1901.

Located 60 km to the south is the Manhattan gold deposit. Manhattan currently hosts proven and probable reserves of 1.7 million tons grading 0.13 opt gold.

The Gilman Gold Property lies east of a major structure that separates the Sierra Nevada batholith to the west from the Basin and Range province. The prominent Walker Lane Belt, a zone of parallel and sub-parallel right lateral strike slip faults, lies along this structural break. The primary focus of exploration at the Gilman Gold Property is for structurally hosted high grade gold mineralization. This style of mineralization is well documented in the literature. The Santa Fe mine, located in Mineral County NV, hosts narrow zones of steeply dipping gold and antimony-rich jasperoid occuring along fault contacts. Reserves for the Santa Fe deposit are reported to be 6.8 million tons grading 0.035 opt gold as of 1990.

Mineralization on the Gilman Gold Property is associated with a steep, westerly dipping and northerly trending range front fault. Sulphides identified include pyrite, arsenopyrite, galena and sphalerite. The altered fault zone has a strike length of 9,000 feet. Previous exploration on the property has been limited, and includes two small adits that exploited a gossanous shear zone and vein structure. Numerous surface samples have returned high grade gold (>1.4 opt).

The Gilman Project has received all permits and is ready to drill. Two to four holes are planned to test a high-grade gold bearing structures.

Crescent Fault

The Crescent Fault property ("Crescent Fault") is located in Eureka County, three miles from the Mill Canyon deposit drilled by Newmont and five miles from the Cortez mine. The property consists of 6 unpatented mining claims covering approximately 120 acres.

The Crescent Fault has been explored by Homestake from 1983 to 1986, Noranda from 1992 to 1994, and North Mining from 1995 to 1996, each of whom carried out drilling. Sampling and mapping has also been carried out. A total of more than 10,000 feet have been drilled. Mineralization encountered in drilling includes 20 feet grading 0.11 opt Au, 25 feet grading 0.05 opt Au and 20 feet grading 0.035 opt Au.

Management intends to drill between 6 and 10 holes next year that will offset known mineralization in historic holes and test new areas to the northeast of the present drilling.

The Bankop property

The Bankop property ("Bankop") is located in eastern Lander County, Nevada, approximately 25 miles (40 km) southeast of Battle Mountain and four miles (6 km) northwest of the Pipeline Mine. The property consists of 24 unpatented mining claims covering approximately 480 acres.

The property is within the Bullion district, which includes the Tenabo and Mud Springs subdistricts to the north and the Gold Acres subdistrict to the southeast. The Bullion district was first prospected in the 1860's. Gold was discovered at Tenabo in 1905 and mined until 1912. Placer gold mining was conducted at Mud Springs and Mill Creek in the early 1930's and the first gold was mined at Gold Acres in 1935.

Although there has been no production from the Bankop property to date, recorded production for the district through 1977 is listed as 300,000 ounces gold and 1 million ounces silver. The Bankop property has been explored since 1965. Exploration companies involved include US Mining and Exploration Company, Phelps Dodge, Placer Amex, Cyprus Exploration Company, Homestake Mining Company, US Borax, Placer Dome US, Noranda Exploration, (Hemlo Gold), Uranerz USA, and Minorca Resources. The company believes this volume of geologic information is a valuable tool for further study of the property.

Regionally, the area is situated within the Battle Mountain-Eureka Trend, a northwest striking 30 to 40 mile wide (45 to 60 km) belt. This trend defines the second most productive gold province in the United States. Gold Acres, located three miles (4.5 km) to the southeast of the Bankop property, is the closest Carlin type mine. Significant gold intercepts of Carlin style mineralization occur on the Bankop property around a trench where sampling detected up to 1.4 g/t gold. Several holes drilled in this area had a high of 0.7 g/t over 5 feet (1.5 m).

The company has completed seven drill holes and is very encouraged with preliminary findings. Result will be available upon completion of laboratory testing.

Bullion Mountain

The Bullion Mountain property ("Bullion Mountain") is located in Lander County, along the Pipeline trend, approximately 6 miles northwest of the Pipeline deposit and 12 miles southeast of Battle Mountain. The property consists of 20 unpatented mining claims covering approximately 400 acres, which include a group of claims known as the Bully claims and the Chief claims.

The property may have been prospected as early as the 1870's during the Utah Camp and Cortez boom, and it contains numerous prospect pits and shallow adits. It lies along the Pipeline fault zone, and has been previously explored by Placer Dome, Asarco, Hemlo, Lac, Barrick and Pallum. Drilling has been carried out on the claims by Asarco and also Placer Dome and Pallum. Surface samples have identified high grade gold (>0.5 opt) in fault zones in upper plate rocks. Drilling has encountered 3 meters of 0.204 opt Au on the Bully claims and 1.5 meters of 0.08 opt Au of 15 meters of 0.02 opt Au on the Chief claims. The nearby gold deposits of Hilltop and Dean occur within the same upper plate rocks, and both deposits contain significant high grade gold in veins with lower grade gold values hosted by breccia zones.

Regional Overview

Regionally, the Crescent Fault, Bankop, and Bullion Mountain properties are located within an area which includes the prolific gold-producing Pipeline / South Pipeline / Cortez Hills / Pediment deposits whose gold production is estimated at 15.7 million ounces over a projected 17-year mine life with 88% recovery [source:mining-technology.com re Cortez Gold Mine]). The Hercules and Gilman properties are located within the Walker Lane, a structural belt extending more than 700 kilometers through western Nevada and into California, which hosts several important gold and precious metals deposits such as Comstock, Rawhide, Aurora, Paradise Peak, Bullfrog, Goldfield, and Tonopah.

Management is very excited about its initial review of the property's geological data.