Mr. Graham Hill reports
SILVER BEAR ANNOUNCES NI 43-101 MINERAL RESOURCE UPDATE FOR THE VERTIKALNY DEPOSIT, MANGAZEISKY SILVER PROJECT, RUSSIA
Silver Bear Resources Inc. has released a National Instrument 43-101 mineral resource update for the Vertikalny deposit within the Mangazeisky silver project in the Republic of Sakha, Russia. The NI 43-101 technical report prepared by Tetra Tech will be filed on SEDAR within 45 days of this release.
Highlights:
-
Infill drilling and trenching have converted an additional 4.3 million ounces of
silver resource to the indicated from the inferred category.
- Additional data and updated geological modelling have also resulted in a
35-per-cent increase in the indicated resource grade, from 909 grams per tonne to 1,227 grams per tonne silver.
- It is expected that the resource update will significantly improve the
internal rate of return (IRR) and net present value (NPV) for the project with minimal change to the capex.
Silver Bear's chief executive officer, Graham Hill, commented: "Silver Bear's infill drilling campaign completed during 2014 and 2015 has produced exceptional results -- not only has it increased indicated silver ounces at the Mangazeisky North deposit (see press release April 13, 2016), but it has also successfully converted additional high-grade resources from the inferred to indicated category at the Vertikalny Central deposit. Most importantly, the weighted average grade of the indicated resource at Vertikalny increased by 35 per cent, substantially improving the prospective shareholder returns for the Vertikalny silver project. The company is in the process of including the updated mineral resource at Vertikalny Central into the revised mine plan and will announce the results when completed."
VERTIKALNY DEPOSITS RESOURCE SUMMARY
Assumed Cut-off Indicated resources
mining grade Ag Grade Ag
Zone method (g/t) Tonnes (g/t)
Vertikalny Central Open pit 200 360,000 1,482
Underground 350 340,000 959
All - 700,000 1,227
Vertikalny Northwest Open pit 200 - -
Underground 350 - -
All - - -
----------- --- ------- -----
Vertikalny deposits total All - 700,000 1,227
=========== === ======= =====
VERTIKALNY DEPOSITS RESOURCE SUMMARY
Indicated
resources Inferred resource
Contained Contained
metal Grade Ag metal
Zone Ag (troy oz) Tonnes (g/t) Ag (troy oz)
Vertikalny Central 17,100,000 4,000 496 100,000
10,600,000 350,000 789 8,800,000
27,700,000 350,000 786 8,900,000
Vertikalny Northwest - 110,000 430 1,600,000
- 90,000 535 1,500,000
- 200,000 476 3,100,000
---------- ------- --- ----------
Vertikalny deposits total 27,700,000 550,000 672 12,000,000
========== ======= === ==========
Tetra Tech has adopted the definition of mineral resources as outlined within the CIM (Canadian Institute of Mining, Metallurgy and Petroleum) definition standards on mineral resources and mineral reserves (2010) in order to classify the resources.
The effective date of the mineral resource estimate is July 8, 2016.
The resource update for Vertikalny Central benefited from an additional 15 diamond holes drilled in 2014, but assayed in 2015, six diamond holes drilled and assayed in 2015, and 21 trenches that were excavated in 2014 but assayed in 2015. The Vertikalny Northwest resource update includes an additional eight holes that were drilled and assayed in 2015.
A new set of wire-frame models have been generated to represent both the strongly mineralized vein and the mineralization associated wall rock alteration, along with oxidation state and lithology models.
Resource estimation assumptions and methods
Key assumptions used to estimate the mineral resources are:
- The mineral resources have been estimated into two separate 3-D block models comprising the following parameters:
- Vertikalny Central -- 10 metres by 10 metres by one metre, with minimum subblock dimensions of 2.5 metres by 2.5 metres by 0.25 metre;
- Vertikalny Northwest -- 10 metres by 10 metres by one metre, with minimum subblock dimensions of 2.5 metres by 2.5 metres by 0.25 metre;
- The estimation was constrained to the mineralized zone using wire-frame solid models. The wire frames were subdomained to isolate the strongly
mineralized main zone from the silver mineralization associated with
wall rock alteration.
- Grade estimates were based on 0.7-metre composited assay data.
- The interpolation of the metal grades was undertaken using ordinary
kriging.
- In order to demonstrate that the deposit has reasonable prospects for
economic extraction, a cut-off grade of 200 grams per tonne silver has been applied
for resources contained within an open-pit shell at Vertikalny Central
or within 80 metres of surface at Vertikalny Northwest. A 350-gram-per-tonne silver cut-off has been applied for the underground resource.
- At Vertikalny Central, a pit shell wire frame was used to constrain the
open-pit resource in order to demonstrate that the resource has
reasonable prospects for economic extraction. The pit shell uses the
following assumptions:
- Silver price of $19 per troy ounce;
- Mining recovery of 95 per cent;
- Waste dilution of 30 per cent;
- Mining cost of $2.53 (U.S.) per tonne;
- Processing cost of $52 (U.S.) per tonne;
- General and administration costs of $40.6 (U.S.) per tonne;
- Royalty of 6.5 per cent;
- Overall silver recovery of 88 per cent.
The revised Vertikalny mineral resource is presented in the attached table, along with all other current mineral resources within the property.
TOTAL RESOURCES FOR THE MANGAZEISKY PROPERTY
Assumed Cut-off Indicated resources
mining grade Ag Grade Ag
Zone method (g/t) Tonnes (g/t)
Vertikalny Central Open pit 200 360,000 1,482
Underground 350 340,000 959
Vertikalny Northwest Open pit 200
Underground 350
Nizhny Endybal Open pit 150
Mangazeisky North Open pit 150 304,000 626
Mangazeisky South Open pit 150
----------- --- --------- -----
Total All - 1,004,000 1,046
=========== === ========= =====
TOTAL RESOURCES FOR THE MANGAZEISKY PROPERTY
Indicated
resources Inferred resource
Contained Contained
metal Grade Ag metal
Zone Ag (troy oz) Tonnes (g/t) Ag (troy oz)
Vertikalny Central 17,100,000 4,000 496 100,000
10,600,000 350,000 789 8,800,000
Vertikalny Northwest 110,000 430 1,600,000
90,000 535 1,500,000
Nizhny Endybal 710,000 316 7,200,000
Mangazeisky North 6,100,000 98,000 671 2,100,000
Mangazeisky South 60,000 246 500,000
---------- --------- --- ----------
Total 33,800,000 1,422,000 477 21,800,000
========== ========= === ==========
Notes
The effective date of the original Nizhny Endybal resource estimate was Sept. 11, 2012; this resource was restated with a higher cut-off grade on the June 10, 2015. The effective date of the Mangazeisky South resource is June 10, 2015. The effective date of the Mangazeisky North resource is March 31, 2016.
The Mangazeisky North, Mangazeisky South and Nizhny Endybal resources are reported above a cut-off grade of 150 grams per tonne Ag, assuming open-pit mining methods.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues.
Geological and sampling procedures
A quality assurance/quality control program is part of the drilling program on all of the deposits on the Mangazeisky property. This program includes chain-of-custody protocols, as well as systematic submittals of standards, duplicates and blank samples into the flow of samples produced by the drilling. Prior to 2011, analysis was carried out at Russian-certified laboratories in Yakutsk and Aldan, Russia. Analysis for 2012, 2013, 2014 and 2015 campaigns were completed by ALS Chemex in Chita, Russia.
Qualified person
The updated indicated and inferred mineral resource estimate was prepared by Robert Davies, BSc, European geologist and chartered geologist. Mr. Davies is senior resource geologist at Tetra Tech and is a qualified person as such term is defined in NI 43-101. Mr. Davies has reviewed the technical and scientific information in this press release relating to the mineral resource estimates, and has approved the use of the information contained herein. The updated mineral resource estimates were generated using the parameters set out above.
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