Case 1:95-cv-00650-LSM
Document 120-3
Filed 02/06/2008
Page 1 of 9
EXHIBIT A
"
Case 1:95-cv-00650-LSM
Thomas Ferrero
Document 120-3
Filed 02/06/2008
Page 2 of 9
Alfred Aloisi v. United States of America
1 2 3
4
5 6
7
IN THE UNITED STATES COURT OF FEDERAL CLAIMS
ALFRED
ALOISI,
et al.,
)
8
Plaintiffs,
9
)
)
vs.
10
UNITED STATES OF AMERICA,
)
No. 95-650L
)
11
Defendants.
12 13 14 15
DEPOSITION OF THOMAS FERRERO
16 17 18 19 20 21 22 23 24 25
Thursday, November 1, 2007
9:18 a.m.
Reported By:
CRAIG W. WOOD, RPR, CSR No. 9789
i~~i~
- -~..,' -.~ ." ... _.-, ..,... ..~
,,;~,. '.-.~.- _..
CRAG WOOD REPORTING
Redding, Californa --- (530) 244-0789
Case 1:95-cv-00650-LSM
Thomas Ferrero
Document 120-3
Filed 02/06/2008
Page 3 of 9
Alfred Aloisi v. United States of Amrica
Page 2
Page 4 "
1
I
2
APPEARCES
3 4 5
2
3
For the Plaintiff:
FOLEY & LANER
. Washington Harbour
4
5
BE IT REMEMBERED that on Thursday, November 1, 2007, conmencing at the hour of 9: 18 a.m, of said day, at the offces of Klamath National Forest, 1312 Fairlane Road, Yreka California, before me, Craig W. Wood, a Certfied
Shortand Reporter in and for'the State of California,
:
6
7
8
3000 K Street, N.W., Suite 500 Washington, DC 20007-5101
BY: LAWRCE G, McBRIE
9 10
11
(202) 295-40 I 7
6 7
8
there personal1y appeaed
THOMAS FERRRO,
who, being fist duly sworn by me to ten the trth, was
For the Defendat:
DEPARTM OF mSTICE
Environmenta & Natul Resources Division
601 D Street, N.W. Washington, DC 20004 (202) 305-0238
9 10
11
examied and testfied as fonows:
-000---
12
13
EXAATION
BY MR. TRUBEN:
Q. Pleae state your full name for the record.
12 13 14
BY: BRUCE K. TRUBEN
Also Prsent:
15
14
15
Fred Aloisi
16 17 18 19
-0
16 17 18 19
A. Thoma Paul Ferero. Q. Mr. Ferero, my name is Brce Trauben, I
reesent the United States, the defendat in this action of Aloisi, et al, versus the United Stites. And I understand you've been deposed in this
acton previously?
20
21
20
21
A. Yes.
22 23 24
25
22 23 25
Q. SO I'm going to forego the norml preliuunares
of explaining the rules of a deposition. I win remind
reason, just say so and we'll take a brea
24 you, though, that if you need to tae a break for àny
Page 3
1
Page 5
1
A. Okay.
2
INEX
3
2
3
Page
Q. Can we sta offby having you take a look at Plaintiffs Exhbit A-171.
A. (Reviewig document.) Okay.
EXATION BY:
Mr. Trauben
4
5
4
Q. What is Exhbit A-I71 ?
4
5
6 7
8
A. It's the cert field notes of a surey of the Klamath Blacksmith Twmel by H. Behrens, done in 1936.
Q. And what is ths - what do these notes show?
'.
6 7
8
9
10
11
A. They show the beargs and distaces from point
to point, mapping the coure of
9 10
11
the Blacksmith Tunel
12 13 14 15 16 17 18 19
EXHBITS
12 13 14 15 16
and some of the side workings off of it. Q. And based on these notes, is it possible to
locate the tuel in the field? On the ground?
A. Based on these notes?
Q. Yes. A. No.
NO DOCUMNTS WERE MAD AS EXBITS
20
21
---000---
22 23 24
25
Q. And the last page, is that a sunar of the notes that you created? A. Ths is my plotting of the data, in the notes. 19 20 Q. And the different -- I' descrbe it for the 21 record, there appear to be five depictions surounding a 22 line that was like thee parlel lines wmch are
23
17 18
j
rug norteast to southwest.
A. Uh-huh.
Q. Does ths - your grpmcal representation show
24
25
~~'¡'ij.Mrr~~..~~~.dÁ'~~-~~~~''',"-,.'-''~..~r'''~~~''''''kæ-~~~i=~ibI..õõ''''''':-'.~~~....,;~ .
2 (Pages 2 to 5)
CRAG WOOD REPORTING
Redding, Californa (530) 244-0789
Case 1:95-cv-00650-LSM
Thomas Ferrero
Document 120-3
Filed 02/06/2008
Page 4 of 9
Alfred Aloisi v. United States of America
Page 58
Page 60
1 Q. At what point?
2 A. October, the October '89 plan wa approved for
,3 phae one and
1 preseration orgazation and all that. Ths was
2 specifically regadig the Mountai Laurel and Rolli.
3 Q. If
par of phae two.
you look at the -- I guess it would be the
the fist page, says; "I
4 Q. Okay. So you're assumg tht a decision had
5 been made by tht tie regadig the Spotted OWL?
6 A. I honestly don't remember how tht played in
7 that approval; whether they had said to us the owl had
4 thd pargrph, bottom of
5 would encourge you to provide to ths deparent a 6 project description outlinng the activities to take
7 place on both private and public lands."
8 been resolved or not at that point, I don't recall.
. 8 Do you recal whether that was done?
9 A. I don't believe it was. Now, we may have
9 Q. Okay. 10 A. It wan't -- I don't recal it beig an issue
I 1 at that point, but it did become an issue -- no. Wait a
12 miute, lm sorr. My memory is wrong. Let me back up.
1 0 supplied them with a copy of our Plan of Operation to 11 the Forest Servce to cover that, but I don't lmow tht
12 for sure. If
I wa doing it today, tht's what I would
13 When I submitted ths long-rage plan it was
14 afer tht tht we were told we needed to mitigate wht I
13 do. But I don't recall if I did that or not.
14 Q. Okay. Then the pargrph above, second
15 descrbed ealier, the ponds and the roads and the apex' 16 corrdor. And we mitigated those thgs and tht resolved 17 the owl issue as fa as we were concerned, as fa as what
18 we wer told And tht's why we were approved in October.
15 pargrph, it states, "As we discussed, a use pennt
16 must be approved and issued, reclamtion plan approved
17 and reclamation agreement executed prior to commencing
18 mig operations on private lands."
19 Q. Okay. And tht wa when the owl wa sti a 20 sensitive species, not yet listed as a theateed or 21 endagered species?
19 A. Yes.
20 Q. And, to your lmowledge, wa a use pennt
21 approved and issued with respect to any opertions in
22 Eddy Gulch?
22 A. Yea. I believe it wan't actly listed
23 until
1990.
23 A. No. Not from the plang deparent.
24 Q. And had a reclamation plan been approved and a
24 Q. SO in Augut '89 tht's reflected in FS-289, 25 the plan on the tale was the June plan tht had been -Page 59
25 reclamation agreement executed with respect to any
Page 61
1 the plan that had been approved in June?
1 opertions on private lands in Eddy Gulch?
2 A. Yes. That was what we were -- what we had at
3 4 5 6 ths point. Yes. Q. Well, sorr to go back and fort but can you go now to plaitiffs document A-44. ' Can you describe for the record what A-4 is?
2 A. No. At tht tie we weren't operatig on
3 private land, so we hadn't gone forward with tht. We
4 were operatig on the goverent land at that point. 5 Q. Okay. And then it says, "Furher, puruant to
6 Asembly Bil 747, a rec1amtiòn plan must also be
7 approved and reviewed by Siskiyou County for that
7 A. It's a letter to me in response to a meetig
8 between myself and I believe it's Wayne Ver -- no. The
8 porton of your project occurg on public lands."
9 Do you see that?
9 letter is from Mar Taylor. Vera wa the plang
10 diector, I believe. No, Robert Siimnon was.
11 Anywy, it's a letter followig up on a meetig
12 13 14 15 with the plang deparent between myself and them regadig Eddy Gulch. Q., And why were you meeting with the planng deparent in March 1990?
10 A. Yes.
11 Q. Was a reclamtion plan approved by the Siskiyou
12 County for any operations by Libert Minig in Eddy
13 Gulch that were planed to occur on public lands?
14 A. I don't recall anytg like that.
15 Q. Had a -- strke that.
16 Can you look at the last page of that letter 17 for me, please. You see in the -- the "cc" at the 18 bottom -- or "pc" identifed in ths case, you see it 19 says, "Fred Aloisi" -president,
16 A. To discuss what we needed to do in terms of 17 county pennttg for the operations on private lands
18 withi the clai.
19 Q. Was your understading that some county
20 pennttg was required for operations even on private
21 lands?
20 A. Yes.
21 Q. -- "as pres," I guess meang
22 A. Actually, it was just the private lands, is
23 what we wer told. The county wasn't involved in the
22 "Diamcmd Core Drlling." 23 A. Uh-huh.
24 Q. Do you lmow what "Diamond Core Drlling" is?
24 governent land, that the Forest Servce was the lead 25 agency with the state. SMA and the historical
~
25 A. Yes. It was an entity created havig to do , . -''''~~-~~.~'''''''..'''''r..~~-...~~~~...,..,..".. ,''' ",,"-''' "'~'..=-r~=,~..o..'""" ~ . . ".'''
16 (pages 58 to 61)
CRAG WOOD REPORTING
Reddig, Californa (530) 244-0789
Case 1:95-cv-00650-LSM
Thomas Ferrero
Document 120-3
Filed 02/06/2008
Page 5 of 9
Alfred Aloisi v. United States of America
Page 62
Page 64
1 with the operations of the core dr tht was bought
2 by -- I believe it was Fred and Don Goodman.
1 meetig? Let me rephre it.
2 Were you there on behalf of
Libert Mie?
3 Q. Did you have any interest in it?
3 A. No.
4 Q. For whom were you there attending ths meetig?
4 A. No.
5 Q. Okay. Can you go to the plaitiffs document
6 A-55, please.
5 A. For me.
6 Q. For you personally?
7 A. I apologize. 45 or 55? Okay.
8 Q. Is ths your handwrtig in the -- up to the
7 A. Yes. 8 Q. Okay. lls wa for your own edification or
9 does ths relate to your work for Libert Minng?
10 A. Yes.
9 ma? Firt seven pages?
lOA. I asked for a meetig with Mie Lee and Al
11 Buchter because I thought that
11 Q. Do you recall havvga meetig with Mie Lee
12 and Al Buchter in Etna on May 9, 1991?
they were mag a
13 A. Oh, yes.
14 Q. If
12 mistae by mag such an issue about such a small
13 operation. And tht -- I told them that we were going 14 down a road where it was going to go on and on and on 15 and it was going to be a big disaster.
16 And I wa trng to
you lOok at the what's identified as
15 page 2/2. Under item five, "Metalurgical Testing," and
16 there are a couple headings. One is
explai to them the scae
17 "Amalgaation/otation."
18 A. Uh-huh.
17 of the thg and that it really had mert and that under
that underlied, it says, 20 "Cyande Lech and Amalgaation -- or
19 Q. And then below
18 the ming law we had a right to proceed as long as we 19 did it clean. And I was going to mae sure it was done
20 clean.
21 And that why didn't they just ease off and if 22 it didn't have merit, we'd fid out. Wè'd sta rug
23 and wouldn't get anytg and we'd go away. But if we
22 A. Yes.
25 . A. Yes.
21 a-m-a-I-wf-I-o-t," see where rm lookig?
23 Q. I guess "a-m-a-I-g" wa the abbreviation for
24 amalgaation?
24 had it, we had a right to mie it.
25 That was basically the reason I held the
Page 63 Page 65
1 Q. And "f-I-o-t" is abbreviation for flotation?
1 meeting, it was on my own to tr to get though to them
2 as a professional to another professional.
3 Q. But you were espousing the position of
2 A. Yes.
3 Q. And then "/cyan," wruch I assume mean cyande 4 leach combination?
4 Mig at that meetig?
6 I mow: he didn't. I did it oñ my own.
Libert
5 A. Yes.
6 Q. Can you explai what these options are, if
5 A. I don't th Fred mew I even had the meetig.
they
7 are options. Wht is "amalgation/flotation"?
7 So, yes, I was presentig the position of that
8 operation, but I was invested in the operation in the
8 A. It's a series of inlling methods where the
9 materal is subjected to one and then another and then 10 another. The tails from the fit one go though the
11 second one. The tas from the second one go though
12. the thd one.
9 sense that, you know, I had thought it up and I thought
10 it was a good plan. And it was phaed so thàt it didn't
11 get out of
had. If it tued out that there were a
13 Basically what you're doing is -- with 14 amgaation, you're extcting the free gold, the
15 coarse and liberated gold that's not encapsulated in
16 silica or coated with carbonation slies or whatever.
12 problem or somethg didn't live up to the expectation, 13 that it would stop at tht point.
14 And that I was going to make sure that it was 15 done clean. rm an engieerig geologist, an
16 envionmental geologist. That's my job. That's what I 17 do out in the rest of the world.
17 And the flotation is a combintion grvity and chemical 18 process that extrcts, makes a concentrte, usually a
19 sulfide. Mostly sulfides come out in that process.
18 And Ijust wanted them to mow that, that it
19 wasn't just some craed miers out there that were going 20 to tear up the run. And it was very small and it
20 And what you don't get with the amgation
21 and the flotation cyande is designed to take a rugh 22 percentage of whatever is le:f because it dissolves the
21 didn't really merit the disaster that appeared to be
22 occumng.
23 gold. 24 Q. At ths meetig in May '91, did -- were you 25 representig the interest of Libert Minig at ths
23 Q. And just to mae clear, you had no stake in the
25 A. No.
24 operation at ths point?
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17 (pages 62 to 65)
CRAIG WOOD REPORTING
Redding, Californa (530) 244-0789
Case 1:95-cv-00650-LSM
Thomas Ferrero
Document 120-3
Filed 02/06/2008
Page 6 of 9
Alfred Aloisi v. United States of America
Page 66
Page 68
1 show the possibilities of where it nnght go. We hadn't 2 decided at that point exactly what we were going -3 whether we were going to include a cyande circuit.
1 Q. Or at any point?
2. A. No.
3 Q. SO, to your knowledge, then, did you discuss
4 with Mr. Lee and Mr. Buchter the potential use of
the
4 We had been advised that it wa going to be
5 difficult to get a cyande circuit. But I also knew
5 cyande leachig opertion in the Eddy Gulch nnes?
6 A. I must have. It's listed here in my list of 7 topics. 8 Q. Was ths -- to your knowledge, is ths the
9 fist tie use of cyade came up in dicussions
6 ITom my own experience that I had worked at opertig 7 cyande nnes and that it certaiy wan't impossible. 8 But I was sort of waitig for the process that wa going
9 on with the company to fallout.
10 regadig -II A. No. I th it was in plan tht led up to
10 Each tie we mae these plan, they were
11 basicaly yearly intervals because we were on ths one
12 year
12 ths, in the plan of operations. 13 Q. To use cyade?
renewa process. And they var. Sometimes we
13 thnk we're going to use cyande;someties we don't.
14 A Yes.
15 Q. In what?
16 A. I'd have to dig. You Wat me to look?
14 But tht wa because we were in the process of testig 15 the effciency of it and weighg the regulatory
16 problems.
17 Q. Well, actuy, let's tae a look. 18 A I have them all in sequence right here. 19 Q. Yeah. Give me just one second.
17 Q. Okay. Just so everybody is clear on the record
18
and everyg, the cyande circuit tht you're
19 referrg to is not the heap leach method?
20 A. We may not have included it in the plan. I
21 mow we were workig on the testig for it long before
22 tht. Let me look.
20 A. Absolutely not. No.
21 Q. Okay. 22 A. No. It's a carbon and pulp vat leach, which
23 taes place in a big ta and you build big concrete
24 contaients that hold
23 Q. Let's go back a couple month il tie and look 24 at Plaitiffs A-I44.
more materal th the ta
25 I\ McBRIE: Show maked as the same as Forest
Page 67
1 Serce 76. But,
25 holds. So even if the tan dissolves or it al empties
Page 69
yes, he has it now.
lout, it's all contained. And the talings are washed
2 BY I\ TRUBEN: Okay. Than you.
3 Q. Is document A-l44 a memoradum that you wrote
4 to the Forest Serce dated March 11th, 1991?
2 and the cyande is recirculated into the system. So
3 it's a closed system.
4 Q. A closed system.
5 And a heap leach system is an open system where
5 A. Yes. 6 Q. And that's your signatue on the second page? 7 A. Yes.
6 cyande solution is leached though a 'pile of ore to
7 extrct gold out in the enviomnent?
8 Q. And ths wa - ths memo that you sent to the
9 Forest Servce wa just a couple month before the
10 meeting in May '91, obviously?
8 A. Well, a properly designed heap leach system is
9 also a closed system. They haven't all worked tht way.
11 A. Yes.
12 Q. Okay. Can you
10 But because the piles are set on a lier, a
11 heavy liner, and the pregnt solution, which is the 12 cyande solution, afer it circulates though the pile
13 and collects under the pile and then is trported
tae a look at the second page,
13 item ten.
14 A. Yes.
15 Q. Number ten. It says there il parentheses "no
16 cyande"?
to
14 the pipes at the low end, it never makes contact with
15 the actu ear, it's separted by a liner. The
16 problems tht have occured in some heap leach
17 A Correct.
18 Q. Were you inonnng the Forest Servce that
17 operations is where the liners have failed. Generaly.
18 Q. SO some contaent systems that you - I th
19 you said, the system that you were contemplating, that
20 would have required some contaient system?
21 A. At tht tie.
19 there were no plans to use cyande in Liber Mines' 20 operations at that point?
22 Q. And between March '91 and May '91, was there a
21 A. Absolutely.' 22 Q. Had there been engieerig designs for a
23 contaient system?
23 decision made at some tie durg that period to use 24 cyande in the Libert Mine opertions?
24 A We never got to that point.
25 A. No. Ths was somethg that I did on my own to
~~.
~ ,.....
~~
25 Q. Take a look at the next page. Looks like the ''''- "...r.-~""~L""""""" ..~~
18 (Pages 66 to 69)
--ab~~-
CRIG WOOD REPORTING
Reddig, Californa (530) 244-0789
Case 1:95-cv-00650-LSM
Thomas Ferrero
Document 120-3
Filed 02/06/2008
Page 7 of 9
Alfred Aloisi v. United States of America
Page 74
Page 76
1 A. Yes.
2 Q. Is that also based on the amlgation and
1 point I was talkg about the operation, but because I
2 was there on my own, I was speakg for myself.
3 flotation?
4 A. No. Underground ore at Eddy Gulch has yielded 5 actuly over a haf ounce fiom grvity separtion
3 Q. But isn't it also fai to say that Libert
4 Minig at that tie wanted its outline plan approved?
5 A. Absolutely.
6 thoughout its history. So that's a very conservative 7 number. And that's probttbly grvity separtion. 8 Q. Grvity-9 I\. McBRIE: Concer about what number is
6 Q. Okay. Then there's a list of eight items.
7 What are those items? Wht do they reflect? 8 A. Say tht aga.
9 Q. The list of item underneat tht headig.
10 actually on the record as opposed to on the page, 0.3?
10 A. They're items that needed to be satisfied.
11 Wht I wa sayig was, yes, we know we need to do these
11 TI WITNSS: 0.3.
12 MR. McBRIE: Yes.
12 thgs to get there, but we just Wat to know that if we
13 do al those thgs, tht the genera plan is not an
13 BYMR TRUBEN: 14 Q. 0.3.
15 Okay. If you look to
14 impossibility conceptuly.
the right where the
15 Q. Okay. Can you please tae a look at A-62.
16 A. Okay.
17 Q. And what is A-62?
16 assumption lie for the underground workings.
17 A. Yes.
18 Q. The cost per ton it appear to be at $100 per
18 A. It looks like a letter fiom me to Har Frey
19 and the subject is "Response to questions in the letter
20 of
20 A. Yes.
21 Q. Is that because of the increased costs in the
22 processing or in the extrction?
19 ton?
Wayne S. Whte, U.S. WilCUife Serce."
March is dated
21 Q. And it's dated 22 A. Yeah. Ths
4, 1993?
March
4, 1993.
23 A. The mig. 24 Q. The mig.
23 Q. And ifI understad correctly, ths was a -24 this is a response to the Forest Serce to questions
25 posed by the Fish and Wildlife Serce?
Page 75
Page 77
25 A. The actu physical mig. Yes.
1 Q. Let's go back a couple pages into the docuent.
2 There's -- at the top of
1 A. Yeah. Har was askig me to help hi respond
2 to the questions tht were being asked by Fish and
the page it says, "Want
3 'outline plan' approval asterisk." Do you see that
4 page?
3 Wildlife, if I could fill in some blan for him, 4 Q. And put it all in context, ths is durg what
5 we refer to as the second consultation on the Spotted
6 . OWL? 7 A. I would guess so from the date. Yes.
5 A. Yes.
6 Q. What does that mean? What did you mean here
7. when you wrote ths, that you want -- or who wats an
8 outline plan approval?
8 Q. Can you tu to the second page, please~
9 That's your signatue?
9 A. It's basically -- the plan we submitted as the
10 all phase plan, that's an outline plan. That is a-II what we were really afer was to know that - the
10 A. Yes.
11 Q. Okay. Item nie. If you could tae a look at 12 that. Okay. And you mie a statement -- well, why
14 A. (Reviewig document.) Okay.
12 genera concept of what we were plamg to do down the
14 the phaes in tenn of
13 road. Even though we wer workig in phases in tenn of 13 don't you go ahead and take a look at item nie.
the details, we didn't want to
15 get halfway down though the process and fid out that
16 the concept of where we were going was impossible. So
17 we wanted to know that the broader plan -- we weren't
18 askig for ever detal, of it to be approved, we were
waste 16 will be. deposited in the ET pit layered with natul 17 material stockpiled around the pit durg its
15 Q. There's a statement there that, "Silica
18 opertion."
19 askig whether they could swallow the whole plan
19 A. Yes.
20 Q. And then the next statement says, "Ths will
21 safely bur mill waste and reclai the ET pit area"?
20 conceptually. And that's what the outline plan is.
21 Q. I appreciate YOl1 anwer. My question actually
22 was a little more simple than that. I was askig who 23 wanted the outline?
22 A. Yes.
23 Q. How do you know that in ths at ths tie?
24 A. How do I know that?
24 A. Oh, I'm sorr. I did. Because ths was
25 somethg I did on my own. I mean, I was -- at that
-~
25 Q. Yes.
.. ~-"..
~~~:i5.¡" ..
.- '
20 (pages 74 to 77)
CRAG WOOD REPORTIG
Reddig, Californa (530) 244-0789
Case 1:95-cv-00650-LSM
Thomas Ferrero
Document 120-3
Filed 02/06/2008
Page 8 of 9
Alfred Aloisi v. United States of America
Page 11 0
Page 1 12
2 deposits are on -- what claim they're on. 2
3 The complaint involves the entire propert, if 3
1 this. I'm just thining in tenns of deposit. The 1
4 I'm not mistaken. Whereas, the contest action was 4
5 narowed to the claims that we were pennitted to operate 5
6 on, I believe. But because I'm not including all the 6
7 properties doesn't mean that we didn't project that we 7
conservatism in this calculation, I assume a smaller deposit because we have less hard data on that area than we do on other places. Q. You used it as a guidance, you said, "We haven't completely blocked that out." Did you mean by
that that it hasn't been totally
or completely
delineated?
A. Right. The boundaries or the exact boundaries
within the ore bodies within the section of
9 I'm stil tring to fuction within the range of 9
8 were going to work those properties. 8
veining
10 what we had -- what we knew and what we were pennitted to 10
11 do at that time for the period of time we're talking 11
12 about, the 1990 to 1994 period. We knew we had a good 12
haven't been -- I can't draw a line and say this is the outer boundaries of that ore body.
15 1\pexes. 15
18 but -- and that's this -- but that was definitely one of 18
23 earlier with Fred about we didn't really have to be 23
13 target under the Union. We knew we had a good target 13
Q. Have you been asked by counselor anyone to -MR. McBRIDE: Object to what asked by counsel
wil be. Attorney-client.
14 under the Six O'clock. And we knew we had the Dumps and 14
16 Now, I haven't included the Union in these totals 16
17 because we never got pennitted specifically to do that, 17
though, is he? Mr. Ferrero is one of
19 our primar targets. 19
20 Q. 21 When you said "the Union," you mean the May 20 Tunel Underground? 21
22 A. May Tunel Underground. You discussed that 22
MR. TRAUBEN: Well, he's not your client, your retained experts in this matter? MR. McBRIDE: Yes. MR. TRUBEN: And your client is Mr. Aloisi and
Libert Mining?
MR. McBRIDE: Uh-huh. All right. You can pursue the question. All right.
BY MR. TRAUB
24 pennitted to go in through the Union TuneL. 24 25 So my -- if you asked me to generate a bottom 25
Page 11 1
EN:
Q. Have you been asked by counselor anyone to revise your chars to include other deposits that are
Page 113
1 line number that would be my recommendation for the
2 evaluation of
1 reflected in these chars that we have in front of
us?
the propert, I would add in that Union --
2 A. No. I made all the decisions that I made on
3 the spreadsheets.
3 that Union deposit. 4 Q. It shows here for the Union deposit on
4 Q. But do you understand my question? In other
5 words, are you going to add in
5 spreadsheet eight, looking at that first, the .05
6 cut-off, profit before capital
additional deposits?
cost at 7.4 milion 7 roughly. And I believe yesterday Mr. Aloisi estimated
8 that it was more along the lines of$30 milion.
6 A. Am I going to?
7 Q. Have you been asked to do that?
8 A. No. The thing about this is that the potential
9 of
9 Do you disagree with that?
the propert from a geologic standpoint is much
LOA. No. I don't disagree with that. I'm trying to
11 be conservative and say, okay. We have this large area 12 of backs, in mining tenninology it means area of vein
13 available. And I just picked an arbitrary 50,000 ton 14 deposit, but the potential is much greater.
10 larger production. I mean, if! went into a statistical 11 analysis of what I believe is there, it would far exceed
12 any of 13 of
this. But I'm tring to stay within the balance
15 Q. And -- I'm sorr. Go ahead. 16 A. We haven't completely blocked it out. We have 17 assays above it. We have some dril holes. We have
18 production on two sides of
what -- you know, we have some descent hard data on. 14 So that's what this is. 15 Q. Then considering the price of gold today, which 16 I think you -- during a break you were sunnising it's
17 around $800 per ounce. Is that correct?
it. We have really strong
18 A. Yes.
19 indicators and good geologic data that we believe 20 there's going to be substantial production from that 21 area. But we don't have enough infonnation to know 22 exactly what that tonnage is.
19 Q. Based on your knowledge of
the deposits that
20 are in the ground in the mining claims at issue in this 21 case in Eddy Gulch, do you think that the mining claims 22 today are worth more than the $17.8 milion reflected on
23 So Fred's $30 milion is well within the range
what I believe we're going to find in -- $30 milion 25 is well within the range. But for the sake of
24 of
23 sheet eight? 24 A. If! calculated it in today's numbers for price
25 and costs with the same parameters that I'm using here,
.d'
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29 (Pages 110 to 113)
CRAIG WOOD REPORTING
Redding, California (530) 244-0789
Case 1:95-cv-00650-LSM
Thomas Ferrero
Document 120-3
Filed 02/06/2008
Page 9 of 9
Alfted Aloisi v. United States of America
Page 114
Page 116 !¡
1 sheet eight.
1 I'm not sure that it would be more because costs have
2 inflated as the gold price has. So it may be in the
3 same ballpark for these deposits.
2 Q. Okay. 3 A. Because that's the way I did it.
4 First of all, behind sheet one there are a number
5 of sampling episodes which include the Forest Service
4 I believe that the propert ultimately if put
5 in production wil yield way more than any of 6 numbers, but if 7 prett close. Because of
these you use these assumptions, it's probably
the incredible rise in price,
6 contest action samples. They include samples by New Cinch
7 Uranium in the 1970s. Include Elmendorf 8 This goes back to 1932. The complete set of
in the 1930s.
base assay
8 the price of mining, along with the incredible rise in
9 the gold price.
9 and metallurgical data.
10 Q. SO, in other words, the prices that are
11 reflected here, these are based on 1990 costs?
10 Okay. I'm talking about sheet one here.
11 MR. McBRIDE: Stil inA-151.
12 A. Yes. 14 A. Yes.
15 Q. And if
13 Q. And 1990 price of gold?
you updated that to reflect the cost
16 today and the price of gold today, you think it would be
17 about the same?
12 THE WITNSS: Yes. 13 BY MR. TRAUBEN:
14 Q. Okay.
all of the 16 different assays and put them under the heading of which 15 A. So what I did was I made chars of
17 deposit, where they came from, whether it was Klamath
18 A. I'm saying it would be in the ballpark. I did
19 do a calculation similar to that on earlier spread
18 Dumps, Klamath Apex, Klamath Ore Stockpiles, Klamath
19 Underground, Union Dump, Union Underground, Mountain
20 sheets that weren't as advanced as these for the
21 contest. And I used a factor, which we have discussed
20 Laurel, Six O'clock Apex, Six O'clock Underground, Ana
21 Johnson.
22 before, for infation, but -- and that inflation was
22 Now, I am -- what I'm doing is I'm giving each
23 sample value of one withi its group and I'm basically 24 creating weighted averages. So that for each little --
23 industral -- was applied to industrial uses.
24 But mining costs have a life of
their own.
25 They're not necessarily equal to every other industry.
Page 115
25 like, for instance, under Klamath Dumps, I have it
Page 117
1 So if I was asked to generate an accurate estimate of
1 broken into the different sampling events on this list.
2 today's cost, I would probably talk to some people that
3 are working in operating a mine right now and find out
2 And then at the bottom I have the weighted average of 3 all of those under that topic, so that I get an average
4 grade for that deposit.
5 So basically what you're looking at is a chart
6 that shows the individual sampling event at weighted
7 average grades from the assays and the metallurgical
8 tests. So that would be head grades from metallurgical
9 tests and assays from just the assays. From each one of
4 what their actual day-to-day costs are to get that.
5 At the time I did those spreadsheets, I didn't
6 have access to that infonnation and I used a round
7 number that is the result of statistics over the last 8 ten years. So I think it's close, but! wouldn't say
9 that it's definitive.
10 And so that 50 percent increase is -- in costs,
11 if
that was true, is a little less than how much the gold
12 price has risen. So that would suggest that maybe we'd 13 make a little more on it now, but I don't know that that
10 the different sampling events, but they're grouped by 11 deposit. Okay. 12 And at the bottom of each one of those groupings
13 is the weighted average of all of those. So you get a 14 deposit wide weighted average of grade.
14 is really true because the mining costs have gone up so
15 much.
15 Q. Okay. What is the colum that's headed "#SA x
16 OPT"?
17 A. Number of samples.
16 Q. Now, these sheets eight and nine rely on
17 infonnation from other work sheets. Is that correct?
18 A. Yes.
19 Q. And so let's work backwards to see how you get
20 to sheet eight. Because sheet eight has the greater
21 value, we'll stay with that and let's figure out on the 22 record how do you get to the 17.8 milion from working 23 off the prior sheets. Can you explain that?
18 Q. And is that the weighting? 19 A. Yeah. That's how you weight -- that's a 20 created weighted average. 21 Q. Okay. So you're weighting the number of
22 samples eight times 0 -- for an example, you're taking
24 A. Okay. I think the best way to explain it is to
25 go back to sheet one and work our way forward toward
23 in the first line of data on sheet one, number of 24 samples eight, times average assay ounce per ton 0.129
25 and that gives the result of 1.032. Correct?
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30 (Pages 114 to 117)
CRAIG WOOD REPORTING
Redding, California (530) 244-0789