U.S. Silver & Gold Provides Third Quarter Production Update;
Cash Costs Reduced by 13%; Average Grade Mined Increased by 18%
TORONTO, Oct. 22, 2013 /CNW/ - U.S. Silver & Gold Inc.
(TSX: USA, OTCQX:
USGIF) ("U.S. Silver & Gold" or the "Company") today
announced
production figures for its Galena Mine Complex in Idaho.
Highlights
Production for the quarter of 529,860 silver equivalent
ounces1 including 464,850 silver ounces which represents
a 15% decrease in
silver production compared with Q3, 2012, and production of
1.67
million ounces for the first 9 months of 2013, an increase of
3%
year-to-date.
Cash costs of $17.67 per ounce silver
for the quarter and $18.16
year-to-date, which
represent reductions of 13% over Q3, 2012 and 5%
year-over-year.
Average mill feed grade for the quarter rose 18% to 11.84 ounces
per ton
silver, comprising 36,359 tons grading 12.83 ounces per ton silver
from
production areas and 7,676 tons of incremental development muck
grading
1.75 ounces per ton silver.
Production from silver/copper areas adjacent to the Caladay
Zone
commenced in the third quarter.? Although installation and
commissioning of additional cooling capacity has impacted
mining
activities in the area, consistent production rates are expected to
be
achieved before year-end and the Company continues to target a
production rate of 100 tons per day.
The previously announced Small Mine Plan2 was
implemented, reducing production, eliminating more than 100
positions and adding one-time severance costs. It will result in
lower
cash and overall costs going forward and increase grade mined to
be
profitable at current silver prices.?
Silver guidance for 2013 remains at 2.1 - 2.2 million ounces
with
production at the Galena Complex during the second half of the year
on
track to deliver 850,000 - 1,000,000 ounces at a cash cost of
$15.50 -
$17.50 per ounce.
The Company expects to release its third quarter financial results
on
Wednesday November 13, 2013.
"We made a strategic decision to implement the Small Mine Plan
early in
the quarter knowing the elimination of more than 100 positions
would
reduce production, create some disruption and temporarily
increase
costs due to severance payments," remarked Darren Blasutti, President
and CEO of U.S. Silver and Gold. "In light of this, I am pleased
with
the quarterly results we achieved and would like to thank
Management
and our employees for their effort and commitment.? We expect
the
fourth quarter to have lower cash costs and expect to meet our
full
year production guidance. In addition, we remain focused on doing
what
is necessary to keep costs low and production profitable in order
to
protect our balance sheet and position the Company well for an
increase
in silver prices."
________________________________
1 Silver equivalent calculation is based on prices of
$22 per ounce gold,
$0.90 per pound lead and $3.25 per pound copper.
2 Please see press release dated July 16, 2013.
Galena Complex Third Quarter Production Details
The Galena Complex produced 464,850 ounces of silver during the
third
quarter of 2013 at a grade of 11.84 ounces per ton and a silver
cash
cost of $17.67 per ounce.? Overall
tonnage and production for the quarter decreased by
28% and 15% respectively; however, this was expected due to
staffing
reductions following implementation of a Small Mine Plan ("SMP"),
which
aimed to reduce production and costs and increase grade to be
profitable at current silver prices.? The decrease in tonnage
was
partially offset by an 18% increase in average grade mined for
the
quarter. Cash costs for Q3 2013 were significantly below costs
during
the third quarter and the first nine months of 2012.
Table 1
Galena Production Highlights
|
?
|
Q3 2013
|
Q3 2012
|
Change
|
YTD 2013
|
YTD 2012
|
Change
|
Processed Ore (tons milled)
|
40,746
|
56,488
|
-28%
|
162,157
|
170,999
|
??????-5%
|
Production (ounces)
|
464,850
|
544,104
|
-15%
|
1,671,172
|
1,623,231
|
??????+3%
|
Grade (ounces per ton)*
|
11.84
|
10.03
|
+18%
|
10.71
|
9.91
|
+8%
|
Cash Costs ($ per ounce silver)**
|
$??? 17.67
|
$??? 20.29
|
-13%
|
$??? 18.16
|
$??? 19.17
|
??????-5%
|
Lead (pounds)
|
705,665
|
1,429,449
|
-51%
|
5,114,010
|
3,860,542
|
+32%
|
Copper (pounds)
|
244,653
|
259,445
|
-6%
|
774,663
|
729,750
|
+?6%
|
* Comprises 36,359 tons of production ore grading 13.06 ounces per
ton
silver and 7,676 tons of development material grading 1.75 ounces
per
ton silver.
** During 2012, the Company changed its presentation of cash costs
to
report under a payable ounces basis to conform to presentation used
by
other comparable entities within the silver mining industry.?
Previous
disclosures have been restated to conform with the amended
presentation.
Small Mine Plan Update
A SMP was implemented during Q3 2013, reducing fixed and variable
costs
as follows:
The number of operating stopes was reduced from over twenty to
approximately fifteen;
Staffing at the Galena Mine Complex was reduced from 351 to 240
and
appropriate severance costs paid;
The Coeur Shaft was put on care and maintenance;
Levels 2800, 3000, 3200, 4300 and 5500 were put on care and
maintenance;
Capital expenditures are limited to mine development activities
that
directly support the SMP;
Exploration is focused on increasing confidence of high-grade
resources
adjacent to current mine infrastructure.
The Company's outlook for silver/lead ore production was
recently
reviewed and based on anticipated operating activity, a decision
was
made to periodically use the Coeur Mill to process any high
grade
silver/lead ore on a campaign basis with staff temporarily
relocated
from the Galena Mill.
Quality Assurance / Quality Control ("QA/QC")
U.S. Silver & Gold maintains a QA/QC Program for all assays,
whether
completed at the Drumlummon laboratory or at a contract
laboratory
including the use of standards, blanks and duplicates. All
QA/QC
results are evaluated using a program of QA/QC monitoring.? Both
the
contract laboratory and the Drumlummon laboratory maintain programs
of
QA/QC as well.? Assays for the Caladay Zone were prepared by a
commercial laboratory located in Osburn,
Idaho.
About U.S. Silver & Gold Inc.
U.S. Silver & Gold is a silver and gold mining company focused
on growth
from its existing asset base and execution of targeted
accretive
acquisitions. It owns and operates the Galena Mine Complex in the
heart
of the Silver Valley/Coeur d'Alene
Mining District, Shoshone County,
Idaho which produces high-grade silver and is the second
most prolific
silver mine in U.S. history, delivering over 200 million ounces
to
date. The Caladay Zone is being evaluated for bulk mining
development.
U.S. Silver & Gold also owns the Drumlummon Mine Complex in
Lewis and
Clark County, Montana.
Mr. Daren Dell, Vice President,
Technical Services and a Qualified
Person under Canadian Securities Administrators guidelines, has
approved the applicable contents of this news release.
For further information please see SEDAR or www.us-silver.com for
the NI 43-101 compliant Technical Report on the Galena Project
dated March 22, 2013.
Cautionary Statement Regarding Forward Looking
Information:
This news release contains "forward?looking information" within
the
meaning of applicable securities laws. Forward?looking
information
includes, but is not limited to, the Company's expectations
intentions,
plans, and beliefs with respect to, among other things, the
Galena
Complex and the Drumlummon Mine. Often, but not always,
forward?looking
information can be identified by forward?looking words such as
"anticipate", "believe", "expect", "goal", "plan", "intend",
"estimate", "may", and "will" or similar words suggesting
future
outcomes, or other expectations, beliefs, plans, objectives,
assumptions, intentions, or statements about future events or
performance. Forward?looking information is based on the opinions
and
estimates of the Company as of the date such information is
provided
and is subject to known and unknown risks, uncertainties, and
other
factors that may cause the actual results, level of activity,
performance, or achievements of the Company to be materially
different
from those expressed or implied by such forward looking
information.
This includes the ability to develop and operate the Galena and
Drumlummon properties, risks associated with the mining industry
such
as economic factors (including future commodity prices,
currency
fluctuations and energy prices), failure of plant, equipment,
processes
and transportation services to operate as anticipated,
environmental
risks, government regulation, actual results of current
exploration
activities, possible variations in ore grade or recovery rates,
permitting timelines, capital expenditures, reclamation
activities,
social and political developments and other risks of the mining
industry. Although U.S. Silver and Gold has attempted to
identify
important factors that could cause actual results to differ
materially
from those contained in forward?looking information, there may be
other
factors that cause results not to be as anticipated, estimated,
or
intended. Readers are cautioned not to place undue reliance on
such
information. By its nature, forward?looking information
involves
numerous assumptions, inherent risks and uncertainties, both
general
and specific those contribute to the possibility that the
predictions,
forecasts, and projections of various future events will not occur.
The
Company undertakes no obligation to update publicly or otherwise
revise
any forward?looking information whether as a result of new
information,
future events or other such factors which affect this
information,
except as required by law.
?
SOURCE U.S. Silver & Gold Inc.