FALLON MINING COMPANY, INC.

BUSINESS PLAN

MARCH 2015
                              

TABLE OF CONTENTS

1.0     Purpose of Business Plan                                                          3

2.0     Capital Budget Desired - $356 million USD NET                       3

3.0     Net Technology and Economic Benefit                                      3

4.0     Corporate Objectives                                                                  4

4.1     Corporate Executive Summary Objectives                                 4

5.0     Flash Oxidation Concentration System (FOXS)                         5

5.1     Future Technology Markets To Develop                                    7

6.0     Corporate Reserves Presented for this Proposal                       7

7.0     Management General Information Summary                             8

7.1     Professional Mining Team Available                                        10

8.0    Financial Plan                                                                            11

          8.1     Analysis of Cash Flow Projections                                  11


          8.2     Complete $356 Million Net Budget                                 11

          8.3     Capital Draw Schedule                                                   14

9.0     Summary                                                                                  16


10.0   Supplemental Information as Exhibits                                      17

FALLON MINING COMPANY, INC.

BUSINESS PLAN - MARCH 2001

1.0   PURPOSE OF BUSINESS PLAN

The purpose of this Business Plan is to set forth summary information required to enter a financial trading program, using proven, certified precious and noble metal mineral reserves located on a corporate owned private Mineral Estate as collateral, to generate sufficient profits to allow the corporation to construct a new extraction and concentration technology system developed by it to allow the commercial mining of existing hydrothermal mineral intrusions located in the Western United States Lakebed ore bodies containing microscopic and cluster precious and noble elements in a high silica-carbonate-refractory material medium. Complete documentation available upon request.  

2.0   CAPITAL BUDGET DESIRED - $356 MILLION USD - NET

The capital being sought under this Business Plan is $356 million USD, net to construct and complete a major mineral concentration plant using this newly developed concentration technology and to construct a small city, which will be required to support this major mineral concentration plant. Sections below provide a detailed explanation of the Use of Capital. The total project is a four-year build out project.

3.0   NEW TECHNOLOGY AND ECONOMIC BENEFIT

The Company spent approximately $26 million in cash and donated capital during period from 1989 to 2006 to develop a new, environmental friendly, non-chemical, method to extract the known microscopic and cluster-type precious and noble elements existing in the various Western Lakebed hydrothermal intrusion deposits. This new technology is discussed in more detail in another section of this Business Plan.  The Company is seeking the $356 million Net USD capital under this Business Plan to finalize the development of this new concentration technology, called the FOXS (Flash Oxidation Concentration System) technology, by constructing a large commercial concentration plant on privately owned Mineral Estates and industrial zoned lands controlled or owned by it in Churchill County, Nevada. This Mineral Estates are is a depressed rural area, which will benefit greatly by the proposed major commercial facility and the proposed city infrastructure designed by the Company to support this Industrial and mining site. The Company feels this new technology will also allow for similar deposits in third world countries to be able to commercially mined, due to low cost of the new technology's operation.

4.0  CORPORATE OBJECTIVES

FMC-NEVA's Objectives, goals and plans for the ensuing four-years include:

CAPITALIZATION: Acquiring the $356,000,000 of NET capital required to complete and operate the permitted FOXS metal extraction plant, achieve a positive cash flow status, and verify probable reserves as proven reserves.
Phase I: Construct a small FOXS system to obtain cash flow and further operating information while the construction of the main plant is in progress.
Phase II: Constructing and installing a second FOXS production system at the Oreana Siding facility budgeted at $3,500,000 to further increase the Corporation's cash flow during construction of the main plant facility at the Trinty site.
Phase III: Constructing and permitting the main plant facility and installing a larger FOXS metal extraction plant on the 594-acre tract purchased across from the Company's main ore body. This expansion module is expected to increase production by eight fold. This main facility is estimated to be in production within 1 1/2 years from receipt of the $356 million funding.
Phase IV: Leasing a 15-acre commercial truck stop/mini-market site, located on the 594-acre tract owned by the Company, to a major oil company.  The Company anticipates that it will realize a positive monthly cash flow from this leasing venture. Building a city and the infrastructure required to maintain it.
Phase IV.A: Developing an equipment sales division to capitalize on the uniqueness of the FOXS process and the zero-emissions Cold Plasma Chamber (CPC) Scrubber.  The widespread commercial demand forCPC Zero-emissions scrubber is expected to be massive.

4.1   CORPORATE EXECUTIVE SUMMARY

FALLON MINING COMPANY, INC. (FMC-NEVA) is a privately held Nevada Corporation licensed in 1989 that directly owns or controls the mineral rights on approximately 12,000 Mineral Estate acres of a western lakebed, hydrothermal, volcanic intrusion ore deposit containing precious and noble metal located in Churchill County, Nevada. The genesis of this ore body was determined through a coring and geological study concluded in 1995.

The Company's main office and plant location is located at 105 Etna Road, Oreana Siding, Highway 80 - Exit 119, Lovelock, Nevada 89419, approximately 110-miles northeast of Reno on Highway 80.

The Company has obtained the appropriate mining and plant permits to process and extract the precious and noble metals from its ore deposit through a Flash Oxidation Concentration System (FOXS), a part of which is a flotation-cell circuit and gravity circuit. The plant facility also contains a research electron beam oven purchased in 1993 from Leybold in Hanau, Germany, and three gravity and leach pilot systems, as well as the FOXS process small bench test and extraction unit. A fully operational extraction and assay laboratory facility is on-site.

FMC-NEVA's corporate direction to date has focused on the exploration of its properties to determine the commercial values of gold and platinum metal reserves; developing an economical extraction system using dry methods; purchasing future plant site acreage; permitting the plant site; and seeking financing to construct a major production plant.   

5.0     Flash Oxidation Concentration System (FOXS) Process - New Technology

FMC-NEVA tested many extraction techniques from 1989 to 1999. The Company was attempting to develop a new environmentally acceptable recovery technology for microscopic metals found in refractory, hydrothermal intrusion ore bodies. Management's goal was to develop a new technology that would meet the following criteria:

Allow for the slurry feeding of the ore as the natural moisture content of these type ore bodies normally exceeded 50%,
allow the slurry to effectively feed into some type of oxidation/reduction unit to take advantage of the natural volatile nature of the precious and noble metals in these type ore deposits due to the particle size of these elements,
remove the clay handling problems associated with these type deposits,
allow the concentration and collection of the stable and stabilized elements,
allow the addition of the necessary free electrons to stabilize the volatiles, and
allow for the cost effective collection of the stabilized gases and micro-fine metallic particles produced to be captured.

The first challenge was to develop a flash oxidation circuit that was designed to accept an ore mist generated by a wet-slurry feed circuit that maintained the required temperature for the desired volatilization, and that allowed the easy introduction of a proposed oxidation/reductive material to assist in the flashing/reducing of the metallic elements in the ore feed. This flash oxidation design was completed in early 1998.

The second challenge was to construct a cold plasma electron chamber to capture the volatile metallic off gases created by the flash oxidation unit. The Company directed its engineering firm to proceed with the construction of the theorized cold plasma electron chamber, which the Company felt was the solution to commercially capturing the off gas elements. A small, cold plasma electron chamber was delivered in late 1999 and it operated with the success expected. The Company engaged the engineering firm to modify the initial unit. The improved version was delivered and operated with success in April 2000. At this April operation, the Company disclosed to the engineering firm what occurred in the plasma chamber regarding the collection of the precious and noble metal gases. It was also pointed out at the April 2000 (first noted at the 1999 initial tests) test that no particles or mist of any kind were being emitted from the cold plasma chamber, thereby effectively creating a Zero-emissions scrubber. This Zero-emissions discovery is immense in its concept for air-emissions controls required by industrial plants. 

The third challenge approached was the wet-slurry feed circuit. The reasoning behind a wet feed system is that the Company’s ore body carries a moisture content ranging from 45% to 65%. It was determined that if a process could be designed to feed the wet ore deposit directly into the system, the massive costs of drying the ore could be omitted. The engineering firm completed the initial dry ore feed tests in August 1998.  The conversion to the wet-slurry feed was simple, and the tests were successful. On August 20, 1998, the engineering firm stated that the initial wet feed system would take a feed rate of 600-pounds an hour. Increasing the feed rate is a function of increasing the feed pipe size.

The fourth challenge was to convert the wet-slurry feed into a form acceptable to the flash oxidation circuit. The engineering firm re-designed an old concept that allowed the pulsating of the feed slurry chamber to create a mist out-feed of the slurry. This mist form proved acceptable to feed the flash oxidation circuit.

The FOXS metal extraction concentrator plant has four principal circuits. The first circuit, a wet-slurry feed circuit, was developed to reduce ore handling costs. The ore is slurried and pumped into a pulsating chamber, where it is effectively blasted apart to un-encapsulate the ore.  This mist-feed enters the second circuit, which is the flash oxidation circuit of the FOXS metal extraction concentrator. The flash oxidation circuit eliminates the calcium carbonate problem associated with hydrothermal intrusions and Nevada ore bodies, as well as, volatilizes and reduces the monatomic, clustered and microscopic precious and noble metals in the ore for collection in the two remaining production circuits, the flotation circuit and the cold plasma chamber circuit. 

The FOXS design utilizes design features taken from a 1936 INCO and Bureau of Mines process involving the Flash Oxidation of feed ore, and design features from a 1986 Bureau of Mines coal gasification theory; inclusion of a magnetic separator; a standard flotation-cell process; and a cold plasma free electron chamber in the final recovery stage, which was found to be necessary to recover the off gassed metallic elements from Electron Beam Furnace tests instigated from 1990 to 1994 by the Company.

5.1   Future Technology Markets to be Developed

Cold Plasma Chamber (CPC) - Zero-emissions Scrubbers: The Company plans on creating an equipment sales division to promote the cold plasma electron chamber as a zero-emission scrubber.
Industrial Plants with emission problems can utilize a larger CPC to augment or replace bag houses or liquid scrubber units for a lower capital costs and operating costs.
Mining industrial mercury retort system rooms can use the CPC to remove mercury and silver vapor contaminants released by these systems.  
Flash Oxidation Concentration System (FOXS): The Company will market the FOXS process to companies with similar ores.

6.0   Corporate Reserves (See Exhibits)

The Corporate reserves are located in Churchill County, Nevada in the area known as the Forty Mile Desert, Lake Mining District. (See Attached Coring Map)                

The 1995 independent Geological and Coring Report states the genesis of the ore deposit as a hydro thermal, volcanic intrusion (boils). Drilling across the 3,982 acres indicates that this ore deposit extends throughout the corporation's other acreage due to the ore deposit'­s specific formation genesis, as well as assay results obtained from many trenches across the acreage not drilled. Future plans include the acquisition of additional fee simple acreage and the drilling of further acreage to expand the proven reserves,

7.0 Management General Information Summary

Douglass C. Boseman, Chief Executive Officer, President and Director

Mr. Boseman served in the United States Marine Corp from 1965 through 1976. Mr. Boseman entered the Marine Corp as an enlisted man and, after passing the College Equivalency Exam, was selected for Officer Candidate's School in 1966, attaining the rank of Captain as a Naval Flight Officer aboard the McDonnell-Douglas Phantom designated as the Marine Fighter F-4 aircraft. Mr. Boseman served with combat distinction and valor in Vietnam from June 1969 to June 1970, operating out of the Chu Lai Marine Air Base south of Danang.

Mr. Boseman attended Clemson University, the Baptist College, and Trident Technical College with primary studies in Economics, Accounting, Hotel Management, and Marketing with a minor emphasis in International Trade and Financial. Mr. Boseman continued his studies through various employment positions in Petroleum Geology, Petroleum Engineering, International Finance, Mineral Extraction Process Engineering, and Landman requirements. Mr. Boseman has maintained the positions of Chief Executive Officer and President of Fallon Mining since 1989.

Joyce A. Meyer, Vice President - Administration and Personnel, Treasurer and Director

Joyce A. Meyer has been a member of the Board of Directors and Treasurer of Fallon Mining Company, Inc. for the past eleven years.  Ms. Meyer was involved with the company from its inception. Before joining Fallon Mining in 1989, Ms. Meyer was employed as an office and accounts manager for several commodity companies located in the State of California.  Ms. Meyer was involved in the acquisition of Fallon Mining Company’s initial mining claims and is an originating officer of Fallon Mining.  Ms. Meyer was instrumental in locating and employing the founding and current president of Fallon Mining Company.  Ms. Meyer has full hands on experience in all aspects of mineral exploration and development, to include, permitting, lease management, budgetary formation, control engineering management, process control management, equipment purchasing, and auditing management.  Ms Meyer is involved in the daily management of Fallon Mining Company as its General Administrator.

Michael A. Pimentel, Chief Financial Officer and Director

Michael Pimentel is the Chief Financial Officer for Fallon Mining Company.  He has been a Certified Public Accountant practicing in California since 1972.  He earned his Masters in Business Administration in Taxation from Golden Gate University and his Bachelor of Arts in Business Administration-Accounting from California State University, Stanislaus.

Mr. Pimentel is a Past State Vice President and Treasurer of the California Society of Certified Public Accountants, a professional member organization consisting of over 27,000 California CPAs.  He also currently serves as a member of Council of the American Institute of CPAs (AICPA).  The Council is the Governing Board for the AICPA, a national professional organization with over 340,000 CPA members.  In October 1999 he was re-elected to an additional three-year term on the Council.

Mr. Pimentel has also served as an expert witness in the United States District Court, and California Superior Courts in several jurisdictions.

James Edgmon, Vice President - Procurement and Director

James Edgmon received his Bachelor of Science degree from California State University, Stanislaus. Mr. Edgmon is a member of the Board of Directors of Fallon Mining Company.  He has been involved in the mining industry for over ten years.  Mr. Edgmon is experienced in dealing with water control regulations, and has developed a working relationship with the Department of Water Resources in the State of Nevada.  He has extensive experience in budgeting and forecasting for existing and start-up business ventures.   Mr. Edgmon has a working relationship with many financial institutions, and is in a position to evaluate the available commercial financing opportunities for the Company, if needed. Mr. Edgmon has also been a farmer for thirty years in Central California and Nevada producing various crops, including farming hay in Nevada for the last twenty-two years. Mr. Edgmon was the first Certified Organic Hay Farmer in the State of Nevada. Mr. Edgmon also has experience as a Real Estate Developer in many commercial, agricultural and multi-family residential developments in California and Nevada. 

7.1   PROFESSIONAL MINING TEAM AVAILABLE TO COMPANY

FMC-NEVA operates with a small professional staff and utilizes consultant contracts with other professional companies when applicable. It has utilized the below professionals and has a standing contract with each of these professionals when required.

Geology Professionals

Anthony Lane & Associates, mining engineering and geology support, Arizona
Porter Geotechnical, Inc, geology and hydro geology support, Reno, Nevada
J. Paul Sawyer, mining engineering, geology and management support, Canada and UK certified

Engineering Professionals

Dale Ortman, SRK Consulting, engineers and scientists, permitting, E.P.A. permits, Reno, Nevada
William Moore, ERRG, Inc., Environmental engineer, permitting, Danville, California
James Schwab, Professional Engineer, process and experimental designs, EnviroCare, Novato, California
Eric Jackalin, Professional Engineer, mine design support, Vancouver, Canada

Assay Laboratories Utilized

LeDoux Laboratories, assay company, Teaneck, New Jersey
Metallurgical Research Assay Laboratories, Phoenix, Arizona
ACULABS, Reno, Nevada
Iseman Consulting, Nevada and Arizona
University of Duisburg, Germany
University of Augsburg, Germany, Institute for Physics

Metallurgical Professionals

Gregg Hodges, Metallurgical Engineer, designed and operated Stillwater platinum plant 1987-1997, Montana

8.0 Financial Plan

The $356,000,000 NET Total Corporate Budget sought under this Business Plan Summary is presented as separate Phase developments as Phase I, Phase II, Phase III, and Phase IV. The Company's complete project plan encompasses a four-year development period, with construction stages occurring at different times, thereby allowing the Company to establish the initial small production unit at a low capital cost, and expand further production construction while realizing a cash flow from the small production plants at its Oreana site. 

The overall life of the mining project exceeds 100 years. The completion date of the total project is based upon production schedules.

The following financial section contains is: 8.1) four-year cash flow projections,8.2) Complete Project Capital Budget, and 8.3) detailed draw schedules.

8.1   ANALYSIS OF CASH FLOW PROJECTIONS FROM OPERATIONS

SEE NEXT PAGES 8.1.A through 8.1.D INSERTED LEGAL FLOW CHARTS

8.2     COMPLETE $356 MILLION NET PROJECT CAPITAL BUDGET

           $356 MILLION TOTAL CORPORATE CAPITAL BUDGET

                          PHASE I - $140,670,000 BUDGET

The Phase I project is the construction and implementation of a small, modular Flash Oxidation Concentration System and Gold Extraction System designed to instigate a positive cash flow from the extraction concentration of gold, silver, platinum and rhodium, which will verify further proven reserves located on the Company's main ore deposit. The Projected Costs are $106,670,000.00 in Capital Costs and $34,000,000.00 allowed for Potential Income Taxes on the Capital Funding.

Estimated costs to complete Special Use Permits and Plant Construction Permitting

$450,000

Estimated costs to complete Water Well System and Water Plant

$14,600,000

Estimated costs for up-grading existing facilities to house FOXS circuit and meet Environmental standards

$280,000

Estimated costs for supporting ore hauling and process equipment

$800,000

Estimated costs for small batch refining circuit to clean  gold, silver, platinum, and rhodium concentrates

$600,000

Estimated costs to liquidate debt

$1,020,000

Allowance for fees associated with funding

$700,000


Total Phase I Costs

$7,000,000

PHASE II - $3,500,000 - DUPLICATE SMALL FOXS SYSTEM

Phase II - construct second plant

Estimated costs to construct second plant 

$3,000,000

Estimated refinery unit expansion

$500,000

Total Phase II Costs Second Plant

$3,500,000

PHASE III - $254,760,000 - MAIN FACILITY

Phase III production expansion plans, include preparing for the permit submission for the future main site; the acquisition of water rights; engineering design of the future main facility; initial site preparation; increasing electrical power installations; and satisfying general requirements to operate a major plant facility.

Estimated engineering and architectural plant design costs for 50,000 square foot process plant with ore handling facilities

$680,000

Estimated engineering and architectural plant design costs for Refinery and equipment support facilities

$350,000

Estimated Environmental Impact Study for future plant site and ore deposit are to be disturbed

$12,500,000

Estimated costs to drill three commercial wells

$360,000

Estimated costs to update power requirements at future main plant

$120,000

Estimated costs to prepare site for 50,000 square foot main plant

$800,000

Estimated costs to purchase Engineering company designing Cold Plasma Chamber (Zero-emissions scrubber)

$24,000,000

Estimated costs to purchase initial mobile dredging ore excavator system for increased production/ haul trucks

$32,950,000

Estimated costs to construct 50,000 square foot future main plant

$22,000,000

Estimated costs to construct full laboratory, including equipment

$16,000,000

Estimated costs to construct two 25-ton per hour FOXS units

Estimated costs to construct precious and noble metal Refinery

$124,000,000

$21,000,000

Total Phase III Costs

$254,760,000

PHASE IV - $90,740,000 - COMPLETE INFRASTRUCTURE

Phase IV includes the full implementation of the projected infrastructure required by a mining company due to the fairly isolated location of the future main plant facility. The Company desires to offer full city infrastructure facilities as well as housing to attract a better class of worker than normally found in the surrounding areas.

Estimated costs for voluntary fire station with two permanent employees certified as firemen - manned 24-hours

$13,500,000

Estimated emergency room/acute care hospital facility, that will be properly staffed on a 24-hour basis

$26,000,000

Estimated costs for housing project for 100 families

$32,740,000

Estimated costs for full Truck/Auto Service Station/Mini-mart with 50-room motel and facilities

$18,500,000

TOTAL PHASE IV

$90,740,000

TOTAL PROJECT COSTS FULL PLAN (PHASES I-IV)

$356,000,000

8.3     CAPITAL DRAW SCHEDULES

                                                       PHASE I

                 $7,000,000.00 CAPITAL BUDGET THIS PROPOSAL

                                  POSITIVE CASH FLOW PHASE

                                         DRAW SCHEDULE - F4

Month

Number of

Employees

Action

Months to

Processing/

Completion

INITIAL

PHASE

$700,000 cost of insurance guarantee

1

11

$6,300,000 complete construction and implementation of daily operations of permitted 6-ton per hour flotation-cell unit and 600-pound per hour FOXS plant

6

                                                      PHASE II

            $3,500,000 CAPITAL BUDGET - SECOND PLANT PHASE

                                     OREANA SIDING FACILITY

                                             DRAW SCHEDULE

Month

Number of

Employees

Action

Months to

Processing/

Completion

4

41

$3,500,000 drawn from Sinking Fund

Established from Phase I production sales of gold, silver, platinum and rhodium

4

PHASE III

$254,760,000 CAPITAL BUDGET - MAIN PRODUCTION FACILITY

TRINITY, NEVADA

DRAW SCHEDULE

Month

Number of Employees

Action

Months to

Processing/

Completion

2

2

0

1

$120,000 to engage local power company to upgrade power requirements

$24,000,000 to purchase Engineering Company

1

3

4

1

$2,500,000 to engage Environmental

Impact Engineering firm to perform E.I.S.

8

4

2

$360,000 to drill three industrial water wells

1

6

1

$800,000 to engage site preparation firm to prepare site for construction of main plant

8

6

1

$4,030,000 to engage main plant construction firm for design and construction

5

6

0

$32,950,000 to purchase initial ore dredge excavator and ore haul trucks         

2

12

52

$121,000,000 to construct two-25-ton per hour FOXS production plants

15

15

18

$21,000,000 to construct, permit and operate main Refinery plant   

3

15

12

$16,000,000 to construct full Laboratory

5

26

12

Begin hauling ore to process; begin main plant production of precious and noble metals, refining, and sale.

1

                                       

PHASE IV

$90,740,000 INFRASTRUCTURE SCHEDULE

AND ESTABLISHMENT OF ADDITIONAL REVENUE STREAMS

DRAW SCHEDULE

Month

Number of

Employees

Action

Months to

Processing/

Completion

6

18

$18,500,000 to construct full service truck and Automobile service station Mini-mart with repairs facilities for drive in traffic as well as corporate service repairs     

5

6

6

4

2

$500,000 to design, permit and locate suitable medical personnel to coordinate

emergency medical facility

$500,000 to design, permit and locate fire station

2

6

8

$13,000,000 to construct fire station

3

12

11

$25,500,000 to construct and staff

emergency medical facility

4

12

1

$32,740,000 to engage engineers and construction firm to layout housing project, and begin construction of housing drawings

11

45

5

Project completed and maintenance with improvements begins

201

Total employees, excluding firemen, police and medical - estimate 300 employees, including service employees

9.0     Summary

The Company believes it has all the elements in place to make this project a major success upon the capitalization of the $356 million Net USD requested:      

Ore Deposit: The Company has established its ore deposit as commercial.
Extraction Production Process: The Company has developed a commercial precious and noble metals extraction process to exploit its mineral estates.
Federal Permit to Excavate Ore: The Company has received its Federal permit to excavate the ore and haul it to its Oreana plant site.
Nevada State Department of Environmental Protection Permit: The Company received its NDEP permit in April 2000 to operate. 
Management: The Company has accumulated extremely talented professionals to operate the permitted flotation-cell and FOXS plant, and has gained access to other highly qualified mining professionals, if and when, required.
Supporting Profit Center: The Company will be able to develop a supporting profit center by establishing an equipment sales division for itsFOXS process and its CPC zero-emissions scrubber. The worldwide sales for these units are expected to be quite large, and the Company expects the equipment division to support its growth during any future downward metal pricing, if any.

10.     Supplemental Information as Exhibits

A supplement binder containing the below listed information is a part of this Business Plan and should not be used as a stand along presentation package. The Company also has additional information on its web site at www.FallonMining.com. Full and complete geological reports; detailed assay reports from various entities cross checking results; and corporate financial data is available upon request.

(SEE EXHIBIT PACKAGE FOR GEOLOGICAL REPORT AND RESERVES)

          A.      Dilp. Ing. A.H. De La Vega confirming custodial assay report

                   prepared through Gerhard Mercator Universitat Duisburg, Germany

                   of Licensed Engineer Eric Jackalin's reserve valuation report.

          B.      Geological Extracts from 2 volume, full geological and coring report

                   Porter Geotechnical of Reno.

________________________________________________________________________

Other Exhibits available:      

2-full volumes geology with maps on genesis of ore on

     disks with picture disk of properties/sites

                                      2. 4 custodial assay reports from different entities

                                      3. Complete coring assays

                                     Business Plan authorized by Board of Directors - March 2001

BUSINESS PLAN

INVESTMENTS