Granite Mountain is located on the Alaska Seward Peninsula about 130 miles east of the town of Nome and 12 miles north of Dime Landing. The topography, situated high along the continental divide, is devoid of large vegetation. Several small creeks have their source at Granite Mountain in the form of natural seeps and surface drainage. The remote location does have a landing strip but no road system. The nearest town, Haycock, is about 15 miles by air. The area does have excellent accessibility via water on both the northern and southern tips.
       Linux Gold’s three claim blocks, totaling 148 separate state mining 160-acre claims, encompass the best areas identified in a series of exploration and sampling programs conducted by the U.S. Geologic Survey in the 1940s, 1950s and 1960s.

       Alaska’s vast and largely unexplored wilderness represents a continuing opportunity for mining companies. Alaska has more land open to mineral exploration and development than any other western state – 49.6 million acres of federal land and 44 million acres of private land owned by native corporations – and has a greater potential for the discovery of world class deposits that many other areas of the world.
       The state already has a reputation for mining elephants. The original Kennecott copper deposit contained ore grading as high as 70%. The Greens Creek Mine produced 7.6 million oz. of silver, 37,000 oz. of gold, and 58,700 tons of lead-zinc concentrate each year. The Teck Cominco Red Dog Mine located 180 miles north of Linux produces over 500,000 tons of zinc, lead and combined concentrates per year and has a mine life of approximately 50 years. Northern Dynasty is Alaska’s Pebble copper deposit, discovered in 1989, contains at least 500 million tons of 0.35% copper gold, molybdenum, porphyry and 0.012 oz. of gold per ton. NovaGold has 4 properties in the vicinity with one containing over 25 million ounces of gold reserve (Donlin Creek) with substantial upside upon further exploration. The other properties contain large reserves of copper and gold. The state is also believed to hold as much coal as in all of the other states combined. And, according to the Alaska Miners Association, within the next 18 months, operators of six mining projects are expected to begin construction of major mines.

       Linux Gold’s claim blocks are all within a virtually unpopulated area within the historic Koyuk Mining District. The area has seen only limited development – mostly small placer mining operations. The tiny native town of Koyuk – originally a supply town for nearby gold and coalmines is located at the mouth of the Koyuk River at the southeastern-most part of the Seward Peninsula.
       Platinum group metals have been recovered during placer gold mining operations of streams draining the Granite Mountain alkaline complex. Unpublished aeromagnetic data indicates that an intrusive ultramafic complex, much larger than the exposed 37 square mile Granite Mountain complex, lies beneath the surface.
       According to the Alaska Office of Project Management and Permitting, there are areas “of high mineral potential” along the watersheds of the Koyuk and nearby rivers. The headwaters of the Peace River, a tributary of the Koyuk, rise in the Granite Mountain area.
       The U.S. Geological Survey has trenched the Peace River and Granite Mountain area with a bulldozer and dug test pits by hand. A report issued in 1968 concluded that the Seward Peninsula was one of the “most favorable regions for prospecting for vein-type (uranium) deposits.”

       Recent drill results (2004) at the Linux Gold’s Fish Creek Gold Target in Alaska’s Fairbanks Mining District indicated economic placer gold values according to a leading placer geologist. Several lode targets were discovered during the placer program. The joint venture partners, Linux Gold and Teryl Resources, plan to elevate the upper part of the pay streak to reserve status this year through further drilling and locate lode deposits similar to the nearby 4 million ounce Fort Knox gold mine.
       Linux Gold is working to retain a reputable independent geologist to evaluate and complete a (43-101) report on its gold properties in Fengning, Hebei Province, People’s Republic of China, with the goal of identifying drill targets that will prove sufficient economic gold to feed a 50-ton per day pilot mill that is on the property. Preliminary testing and samples are excellent with some results as high as 2 oz. per ton AU.

       Linux Gold recently raised US$500,000 and is well financed to pursue the first stage of exploration at Granite Mountain. The company faces minimal property acquisition costs for the new Seward Peninsula claims since all are
on State of Alaska public lands and are open to mineral entry.
       During the coming year, Linux Gold plans a geophysical survey to map the structure, rock contacts, and potential mineralized zones below the extensive tundra cover of the Granite Mountain area. Detailed geochemical and ridgeline mapping of the Kiwalik and Peace River claims will identify potential metal-rich drill targets. The company also plans an examination of Dime Creek’s previous placer workings, as well as sampling of virgin gravel and bedrock outcrops.
       Jeff Keener, Linux geologist, believes areas of Granite Mountain are similar geologically to Northern Dynasty’s Pebble porphyry gold-copper-molybdenum project, the largest deposit of contained gold and the second largest deposit of contained copper resources in North America.