New Jersey Mining Company To Modify Operating Agreement

COEUR D'ALENE, ID - New Jersey Mining Company has signed a Memorandum of Understanding (MOU) to modify the Operating Agreement that governs management of the Butte Highlands Gold Project (Butte Highlands), a high-grade, underground gold mine near Butte, Montana.

NJMC and Highland Mining LLC each hold a 50-percent interest in Butte Highlands Joint Venture LLC (BHJV), which owns Butte Highlands. Highland Mining is funding all mine development costs through to commercial production with NJMC's share of those costs to be repaid from proceeds of future mine production. Highland Mining is a wholly-owned subsidiary of Montana State Gold Company LLC (MSGC).

The non-binding MOU calls for NJMC, based on agreed to budgets and financing, to assume control of permitting and other day-to-day management functions at Butte Highlands, most of which will be led by NJMC Vice-President Grant Brackebusch. The Company and Highland Mining LLC have agreed to then formalize the MOU and execute a definitive agreement for purposes of moving the project forward and financing it into production.

NJMC President John Swallow stated, Our business plan is to strategically develop and/or acquire assets that have the potential to provide cash flow and this is another step in that direction. We recently met with our joint venture partner and together we outlined a big picture plan, from permitting and engineering to financing and eventual production. As we and our partner clearly possess complementary skill sets, we agree that we can and should move forward in a logical and professional manner, building upon the outstanding development work performed to-date at Butte Highlands.

Highland Mining Manager Sima Muroff added, We are excited to have NJMC as our new partner at Butte Highlands. John and the NJMC team have a proven track record of entrepreneurial spirit, successful operations. Together, we look forward to developing a solid working relationship as we advance Butte Highlands toward production, creating sustainable jobs and other tangible benefits to the Butte community.

More than $30-million has been invested at Butte Highlands since 2009, including more than 4,500 feet of underground development and construction of surface facilities, all of which are on private lands owned by BHJV. Construction at Butte Highlands was completed primarily by Small Mine Development Corporation, which also constructed a modern gold mine at NJMC's Golden Chest property.

NJMC also reported that it is developing plans to resume production at its Golden Chest Mine this summer. The Company purchased and took delivery of an underground dump truck and an underground loader last week and expects to lease a variety of now-idle underground mining equipment and vehicles from BHJV.

The Golden Chest Mine produced ore from late-2014 until September 2015, all of which was processed at the New Jersey Mill. Upon the cessation of operations, NJMC maintained the project with resumed production in mind, supported by production records and all drilling and modeling data. A recent scoping study assessed the production readiness of near-mine mineralization, including areas that were included in the mine plan but were not mined, as well as other accessible, drill-tested areas. NJMC seeks to develop a small-scale mining plan at Golden Chest with a production target of 3,000 tonnes per month.