United Silver Corp.:
-- PEA Mineralized Tons Processed
(Diluted)
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. (“United Silver corp.”, the “Company:, or
“USC”: TSX; USC: OTC; USCZF: Frankfurt: UM8) announces
the results of an updated National Instrument (“NI”) 43-101
compliant resource estimate and Preliminary Economic Assessment
(“PEA”) for its Crescent Mine located in the Big Creek drainage of
Shoshone County in the Silver Valley of North Idaho, United States
of America (“USA”). This NI 43-101 Technical Report which was
independently prepared by SRK Consulting (U.S.) Inc. (“SRK”) of
Reno, Nevada, USA, determined that USC’s 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 (“opt”) 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 SRK’s Jay
Pennington, C.P.G. with 28 years of exploration and resource
geology experience in precious and base metals and a qualified
person (“QP”) 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 – Mineral Resource Statement for the Crescent Silver
Deposit, SRK Consulting (U.S.) Inc., July 22, 2013
MineralizedVein
Cut-offopt Ag
Tons(Undiluted)
Grade optAg
ContainedMozs 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
8 opt 520,000 14.4
7.5 South Vein Inferred 8 opt 152,000 18.4 2.8
AlhambraVein
Inferred 8 opt 118,000 10.2 1.2
JacksonVein
Inferred 8 opt 260,000 17.7 4.6
Total Inferred 8
opt 530,000 16.2 8.6
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 ft9. 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 – Summary of PEA Mineral Resources by Resource
Category
Mineralized
Cut-off Tons
Grade
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
8 opt 317,000 15.1
4.8 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 8
opt 134,000 13.9 1.9
CEO Graham Clarke of United Silver Corp. commented “USC
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.”. “The 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 SRK’s
recommendations.”
Highlights of the Preliminary Economic Assessment at $20 per
ounce silver
SRK’s 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 (“NJMC”) 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 – Operating parameters utilized
Mining Costs
$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
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 “Qualified Person” 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 Valley’s prolific Silver Belt -
directly between two of the district’s 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.
“Graham Clark”Chief Executive
Officer
For further information, please contactGraham
Clark604.696.4236.
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 SRK’s 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.
United Silver Corp.Graham Clark, 604-696-4236Chief
Executive Officer