VANCOUVER, British Columbia -- (Business Wire)
United Silver Corp.:
-- PEA Mineralized Tons Processed (Diluted) |
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|
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|
Â
|
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|
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|
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| 601,000 Tons |
-- Silver Recovered | | | | | | | 6,108,000 Ounces |
-- IRR at $20 US Silver | | | | | | | 31% Post Tax |
-- Net Present Value @ 8% Discount | | | | | | | $8,834,000 |
-- Cash Cost Per Ton Mill Feed Mined | | | | | | | $99.93 Per Ton |
-- Cash Cost Per Ounce Recovered | | | | | | | $9.83 Per Oz Silver |
-- Preproduction Development Cost | | | | | | | $12,121,000 |
-- Total Capital Cost | | | | | | | $13,993,000 |
United Silver Corp. (âUnited Silver corp.â, the âCompany:, or âUSCâ:TSX; USC: OTC; USCZF: Frankfurt: UM8) announces the results of an
updated National Instrument (âNIâ) 43-101 compliant resource estimate
and Preliminary Economic Assessment (âPEAâ) for its Crescent Mine
located in the Big Creek drainage of Shoshone County in the Silver
Valley of North Idaho, United States of America (âUSAâ). This NI 43-101
Technical Report which was independently prepared by SRK Consulting
(U.S.) Inc. (âSRKâ) of Reno, Nevada, USA, determined that USCâs Crescent
Project silver deposits demonstrate strong economics at the PEA level.
The updated resource estimate indicates the in situ Measured and
Indicated resources increased 8.7% and the Inferred resources increased
28.4% on an ounces basis at a silver cut-off grade of 8 ounces per short
ton (âoptâ) as compared with the resources in the SRK NI-43-101
Technical Report filed on SEDAR May 31, 2010. The 2013 resource estimate
is informed by a larger drill database and the addition of over 2,300 ft
of production data from recent development drifting. USC also provided a
more extensive database of density determinations, which resulted in an
increase in the average density for the deposit.
SRK concludes that the property merits the expenditure of additional
funds to complete the secondary egress, the completion of additional
development drifts on structure to further define and delineate the
three mineralized veins identified to date, implementation of diamond
drilling to assist with further resource delineation within the three
veins, exploration drifting on structure to explore mineralized veins
along strike and additional metallurgical test work to try and enhance
the recoveries achieved to date on 12,607 tons of mineralized material
mined from development and exploration headings.
The 2013 updated Mineral Resource was prepared by SRKâs Jay Pennington,
C.P.G. with 28 years of exploration and resource geology experience in
precious and base metals and a qualified person (âQPâ) with respect to
Mineral Resource estimation under NI 43-101. Table 1 reports the total
in situ underground Mineral Resource at a cut-off grade of 8 opt.
Table 1 â Mineral Resource Statement for the Crescent Silver Deposit,
SRK Consulting (U.S.) Inc., July 22, 2013
Mineralized Vein |
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| |
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| Cut-off opt Ag |
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| Tons (Undiluted) |
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| Grade opt Ag |
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| Contained Mozs Ag |
| Category | | | | |
South Vein | |
Measured & Indicated
| |
8 opt
| |
236,000
| |
14.4
| |
3.4
|
Alhambra Vein | |
Measured & Indicated
| |
8 opt
| |
152,000
| |
13.2
| |
2.0
|
Jackson Vein | |
Measured & Indicated
| |
8 opt
| |
132,000
| |
15.9
| |
2.1
|
Total Measured & Indicated |
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| 8 opt |
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| 520,000 |
Â
| 14.4 |
Â
| 7.5 |
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|
South Vein | |
Inferred
| |
8 opt
| |
152,000
| |
18.4
| |
2.8
|
Alhambra Vein | |
Inferred
| |
8 opt
| |
118,000
| |
10.2
| |
1.2
|
Jackson Vein | |
Inferred
| |
8 opt
| |
260,000
| |
17.7
| |
4.6
|
Total Inferred |
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| 8 opt |
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| 530,000 |
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| 16.2 |
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| 8.6 |
| | | | | | | |
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|
Notes:
1. Mineral resources that are not mineral reserves do not have
demonstrated economic viability.
2. No measured or
indicated mineral reserves have been defined.
3. The
cut-off grade for mineralized zone interpretation was 4 opt.
4.
The block cut-off grade for defining Mineral Resources was 8 opt.
5.
The silver price used was $US 20 per troy ounce, mining and processing
costs of $99.93/ore ton, and 92% mill recovery were used to define the 8
opt cutoff.
6. The resources reported above are
non-diluted.
7. Measured Resources required blocks to be
informed by a minimum of 8 composites and those blocks must be less than
120 ft from previous production.
8. Indicated Resources
required blocks to be informed by composites from a minimum of two drill
holes and distance from data less than 300 ft
9. The
resources mined from the intermediate drifts have been deleted from the
2013 updated resources.
No measured or indicated reserves of any category were identified.Although a conceptual Preliminary Economic Assessment (PEA) was
completed, no formal economic or engineering work that would enable
identification of mineral reserves has yet been carried out.Mineral
resources are not mineral reserves and by definition do not demonstrate
economic viability.There is no certainty that all or any part of
the mineral resources will be converted into mineral reserves.
Due to the uncertainty that may be attached to Inferred Mineral
Resources, it cannot be assumed that all or any part of an Inferred
Mineral Resource will be upgraded to an Indicated or Measured Mineral
Resource as a result of continued exploration. Confidence in the
estimate is insufficient to allow the meaningful application of
technical and economic parameters or to enable an evaluation of economic
viability worthy of public disclosure. Inferred Mineral Resources are
excluded from estimates forming the basis of feasibility or
pre-feasibility studies.
The updated resource estimate was informed by 279 drill holes and 1,357
chip channel assays from three intermediate drifts completed on the
South Vein and one intermediate drift on the Alhambra Vein that were
completed since the 2010 resource update was filed. Estimation was
carried out using inverse distance weighting of declustered
full-vein-width composites. Independent vein wireframes were used to
code block percents into model blocks with dimensions 25x25x50 ft (XYZ,
respectively).
The Technical Report identifies, estimates and summarizes resources in
the three veins incorporated in this updated resource estimate. The
three veins are the Alhambra Vein which prior to 2011 has produced over
25 million ounces at an average grade of 27 opt silver. The South Vein,
a structure whose existence has been known for more than 50 years, but
was not known to host potential economic grade mineralization until
surface drilling intercepts identified that mineralization in 2007. The
Jackson Vein, a newly identified vein that was not distinguished from
the South Vein during the 2007 through 2010 drilling campaigns. This
vein was modeled as a separate vein during the updated resource estimate
based on mapping and assay data obtained from three of the intermediate
drifts completed during underground exploration and development work in
2011 and 2012. There is a strong indication that the Jackson Vein may be
a link vein between the South Vein and the Alhambra Vein which generates
a new and focused exploration target for future diamond drilling and
underground development.
The deposit model identified strike and dip extensive zones of
mineralization on both of the narrow vein structures hosting the
Alhambra (2,000 feet on strike and 2,000 feet down-dip) and South Veins
(2,000 ft on strike and 1,800 feet down-dip). The Jackson Vein was
identified over a smaller area (1,400 ft on strike and 1,500 ft
down-dip). Mineralization averages 3.5 feet wide on the South Vein but
varies from less than 1 foot to 18 feet wide. The Alhambra Vein averages
3.0 ft wide and varies from less than 1 foot to 10 ft wide. The Jackson
Vein averages 2.5 ft wide and varies from less than 1 foot to 5 ft wide.
Silver mineralization in all three of these veins is hosted in St Regis
rocks, a lithologic rock unit known to be a favorable host for high
grade silver mineralization in other mines along the Silver Belt.
Crescent Mine Resources
In this NI 43-101 resource update, SRK lowered the block model cut-off
grade from 11 opt to 8 opt and used a silver price of $20 per ounce. The
lower cutoff grade is supported by recent collaborative mine planning
and cost estimation carried out by USC and SRK.
The Mineral Resource used as the basis for the PEA is presented in Table
2.
Table 2 â Summary of PEA Mineral Resources by Resource Category
Mineralized |
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|
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|
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| Cut-off |
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| Tons |
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| Grade |
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| Contained |
Vein | | Category | | opt Ag | | (Undiluted) | | opt Ag | | Mozs Ag |
South Vein | |
Measured & Indicated
| |
8 opt
| |
169,000
| |
15.4
| |
2.6
|
Alhambra Vein | |
Measured & Indicated
| |
8 opt
| |
104,000
| |
13.5
| |
1.4
|
Jackson Vein | |
Measured & Indicated
| |
8 opt
| |
44,000
| |
18.2
| |
0.8
|
Total Measured & Indicated |
Â
| 8 opt |
Â
| 317,000 |
Â
| 15.1 |
Â
| 4.8 |
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|
South Vein | |
Inferred
| |
8 opt
| |
71,000
| |
16.2
| |
1.2
|
Alhambra Vein | |
Inferred
| |
8 opt
| |
43,000
| |
10.7
| |
0.5
|
Jackson Vein | |
Inferred
| |
8 opt
| |
20,000
| |
12.5
| |
0.3
|
Total Inferred |
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| 8 opt |
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| 134,000 |
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| 13.9 |
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| 1.9 |
| | | | | | | |
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|
CEO Graham Clarke of United Silver Corp. commented âUSC continues to
deliver on its plan to return the Crescent Property to commercial
production and profitable mining operations. This NI 43-101 resource
update confirms the presence of three veins that host silver
mineralization averaging from 12.6 to 15.9 opt using a cutoff grade of 8
opt. The material considered for mine planning and the PEA economic
evaluation consists of a Measured and Indicated Resource of 317,000 tons
containing 4.8 million ounces at an average grade of 15.1 opt silver and
an Inferred Resource of 134,000 tons containing 1.9 million ounces of
silver at an average grade of 13.9 opt.â. âThe PEA economic model
indicates that when using a silver price of $20 per ounce, the Project
has an IRR of 31% and an NPV of $8.8 million using an 8% discount rate.
Additionally, block modeling has identified large target areas for
exploration between widely spaced drill holes (from 200 to more than 500
feet) that will be explored and developed using both underground mine
development and diamond drilling The exploration program is designed to
increase both the quantity and quality of resources as development
drifting is completed. As soon as additional financing is completed USC
will begin implementing SRKâs recommendations.â
Highlights of the Preliminary Economic Assessment at $20 per ounce
silver
SRKâs NI 43-101 compliant Technical Report contains a PEA of the
Crescent Mine Project, which means the report is a preliminary
assessment study that includes an economic analysis of the potential
viability of mineral resources developed at this early stage of the
Project. While a typical PEA is accurate to +/- 35% , the Crescent PEA
cost estimation is considered by SRK to be of higher confidence, and was
developed from a combination of actual costs from recent underground
development work and first principals consisting of best available
estimates from mine/mill cost and designs in conjunction with the NI
43-101 updated resource estimate. Because a PEA is not a feasibility or
formal economic study, inferred resources were utilized in the
assessment. It was completed in support of the NI 43-101 resource update.
Previous underground development work produced slightly more than 12,607
tons of material that was milled at the New Jersey Mining Company
(âNJMCâ) mill. Milling costs and silver recovery were based on costs and
results from that work. Smelting and refining charges are based on
actual costs for the concentrates produced.
Table 3 â Operating parameters utilized
Mining Costs
|
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|
$55.09 per ton
|
Processing Cost (Including haulage, mine to mill)
| |
$26.76 per ton
|
General and Administrative
| |
$18.08 per ton
|
Total Costs
| |
$99.93 per ton
|
Dilution
| |
33%
|
Mill Recovery
| |
92%
|
Production Rate
| |
400 tons per day
|
Mining Schedule
| |
7 days per week
|
Silver Price
| |
$20 per ounce
|
Cost Per Once Produced
| |
$9.83 per ounce
|
| |
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|
Preproduction development costs include mine development capital with a
25% contingency, costs for test mining, exploration drilling and initial
working capital. These costs will be offset by $1,856,000 income from
processing of mineralized material produced from test mining.
The mine plan is based on a 34 week mine development schedule to tie the
upper Countess Decline to the lower Big Creek #4 Cross Cut. Normal mine
production will begin as soon as these headings intersect, enabling a
second means of egress from the mine. During this period there will also
be some additional development from the Countess Decline to access the
South Vein for stope development on additional mining levels.
Production is scheduled from the South, Jackson and Alhambra Veins. The
South and Jackson Veins will use a mechanized mining system
incorporating primarily uncemented waste rock for backfill. The plan
allows for the mineralized material to be blasted first and removed from
the stope. Waste will then be blasted and left in the stope for backfill
and to make sufficient room for mechanized equipment to work in the
stope. A one foot cemented backfill cap will be placed on the backfill
to minimize loss of mineralized material into the fill. One foot of
dilution at zero grade has been incorporated into the schedule and
economics. It is expected that Jackson Vein mining will be similar to
that for the South Vein.
The Alhambra Vein will be mined using a conventional overhand cut and
fill stoping method. Each stope will incorporate two manways into the
stope to allow for ventilation and alternate egress and an ore chute.
The blasting and moving of mineralized material will be similar to the
South Vein with allowances for the narrower vein expected along the
Alhambra Vein. Mineralized material will be moved to the chute using
slushers. LHDs will haul the material from the chutes to the ore pass
where it will fall to the Big Creek #4 level and be hauled in rail cars
to the surface.
Opportunities and Recommendations
The Project is very sensitive to silver prices; a decrease in the silver
price to $18/oz lowers the IRR to 5%. Increasing the silver price to $22
raises the IRR to 55%. Each $1.00 increase in the price of silver will
improve the IRR approximately 12.5%.
SRK recommends diamond drilling from current underground workings to
increase the confidence in the mineralized grade and thickness of
under-explored areas of the current resource that are included in the
mine plan.
Additional exploration drilling and drifting is recommended following
completion of the secondary exit to resume exploring underexplored areas
along the strike lengths of both the Alhambra and South Vein structures.
With the presence of the Jackson Vein as a possible link vein between
the Alhambra and South Vein, exploration should be conducted for
additional link veins.
Additional metallurgical testing is recommended to improve silver
recovery in oxidized portions of veins, primarily those areas within
about 500 feet of the surface. Testing is also recommended to determine
how to improve concentrate grades. USC also plans to investigate other
smelter alternatives to achieve more favorable smelter terms.
The technical aspects of this press release have been reviewed and
approved by Michael P. Gross M.S., P.Geol., Chief Operating Officer of
United Silver Corp., who is the âQualified Personâ for this project as
defined by NI 43-101 regulations.
ABOUT UNITED SILVER CORP.
USC is a vertically integrated Canadian mining company with operations
in Idaho, USA. It has an 80% interest in the Crescent Silver Mine
project in the Silver Valleyâs prolific Silver Belt - directly between
two of the districtâs historically largest silver producing properties,
the Sunshine and Bunker Hill mines. USC also offers a full suite of
mining services including contract mining and providing a complete
fabrication shop and service for building and repairing mining equipment
to silver miners in the district. USC's common shares trade on the
Toronto Stock Exchange under the symbol "USC". For more information
about USC, please visit: www.unitedsilvercorp.com
ON BEHALF OF UNITED SILVER CORP.
âGraham Clarkâ
Chief Executive
Officer
For further information, please contact
Graham Clark
604.696.4236.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of the content of this news release.
Forward-Looking Statements
This news release contains forward-looking information which is subject
to a variety of risks and uncertainties and other factors that could
cause actual events or results to differ from those projected in the
forward-looking statements. Forward looking statements in this press
release include that USC continues to deliver on its plan to return the
Crescent Property to commercial production and profitable mining
operations; that large target areas for exploration between widely
spaced drill holes that will be explored and developed; that the
exploration program can increase both the quantity and quality of
resources as development drifting is completed; that the program will be
carried out as indicated; and that as soon as additional financing is
completed USC will begin implementing SRKâs recommendations. These
forward-looking statements are based on the opinions and estimates of
management and its consultants at the date the information is
disseminated. They are subject to a variety of risks and uncertainties
and other factors that could cause actual events or results to differ
materially from those projected in the forward-looking information.
Risks that could change or prevent these statements from coming to
fruition include changing costs for mining and processing and their
impact on the cut off value established; increased capital costs;
changing forecasts of mine production rates; the timing and content of
upcoming work programs; geological interpretations based on drilling
that may change with more detailed information; potential process
methods and mineral recoveries assumption based on limited test work and
by comparison to what are considered analogous deposits that with
further test work may not be comparable; the availability of labour,
equipment and markets for the products produced; market pricing for the
products produced; our possible inability to service our debts and pay
liabilities as they become due; and despite the current expected
viability of the project, conditions changing such that the minerals on
our property cannot be economically mined, or that the required permits
to build and operate the envisaged mine can be obtained. The
forward-looking information contained herein is given as of the date
hereof and the Company assumes no responsibility to update or revise
such information to reflect new events or circumstances, except as
required by law.
Contacts:
United Silver Corp.
Graham Clark, 604-696-4236
Chief
Executive Officer
Source: United Silver Corp.
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