News Release #99-05
August 25 , 1999 First Silver
Reserve Inc.
Suite 600 - 700 West Pender Street
Vancouver, B.C., Canada ,V6C 1G8
Telephone (604) 602-9973
FAX (604) 682-8728
Toll Free 1-888-377-6676
Website: firstsilver.com
E-mail: firstsilver@hotmail.com
Second Quarter 1999 Results
In the six month period ended June 30, 1999, First Silver Reserve Inc. produced 1,093,133 ounces of silver and 1,124 ounces of gold from the Company's wholly owned San Martin Silver Mine in Jalisco State, Mexico. Total mill throughput for the period was 134,632 tonnes, as compared to 130,000 tonnes in first half of 1998. The mill head grade was 298 g/tonne silver and the mill recovery rate was 84.75% as compared to a grade of 323 g/tonne and a recovery rate of 89.24% in the first half of 1998. While six-month production was 95,936 ounces of silver lower than the same period last year, second quarter production exceeded second quarter 1998 production by 34,281 ounces of silver.
Revenue for the period was US $5.4 million compared with US $6.1 million for the same period in 1998, reflecting lower production and a lower average realized silver price. Net earnings for the six months ending June 30 were US $342,718 compared with net earnings of US $1 million for the same period in 1998.
Increase in San Martin Mineral Resources
Pincock Allen and Holt (PAH) have completed their independent audit of reserves and estimate of resources at First Silver's San Martin mine in Jalisco State, Mexico. The PAH report is as at year-end 1998 and compares 1998 reserves and resources with year-end 1997 values. Total reserves and resources have increased 45% to a total of over 90 million ounces.
A summary of the mineable reserves, including 12% mining dilution and a 90% mining recovery and the total inferred resource, is presented in the following table:
Zuloaga Mineable Reserves and Inferred Resources
As at December 31, 1998
Category Tonnes* Silver grade
Grams/tonne Contained Silver
(million ounces)
Proven 828,668 322 8,579
Probable 424,368 343 4,680
Total Mineable Reserves 1,253,036 329 13.259
Total Inferred Resources 9,927,210 241 76.908
Total Mineable Reserves and Inferred Resources 11,180,246 251 90.167
* First Silver uses conventional manual methods to calculate the average tonnage and grade of reserves and resources.
The "proven" ore category of the mineable reserve has been projected 25 meters from the last ore grade data source and the "probable" ore category has been projected another 30 meters beyond the proven ore. Any material beyond the probable category is classed as an inferred resource.
All reserve calculations by PAH assumed a silver price of $5.50 – at silver prices above $5.50, cut off grade is lowered and reserves increase significantly.
PAH also confirmed operating cost data for 1998. The cash cost of production (net of gold credits) was US$2.95 per ounce, well below current silver prices and among the lowest cost of production in the industry.
The PAH report states "PAH believes that there is excellent potential that part of the currently identified inferred resources will be converted to mineable ore reserves and that there is good potential for finding and developing new reserves in the district".
San Martin Mine Exploration and Resource Development
The Company's main mine exploration target remains the El Banco area, at the intersection of three mineralized structures (La Zuloaga, Rosario-Condesa and La Mancha). This prospective area is located approximately 500 m west of the current mine workings and is in an area of steep surface terrain which has limited surface drilling. A horizontal drift towards El Banco is being developed from the western most extent of the mine workings. Progress has been hampered by poor rock conditions which have necessitated roof bolting and wall reinforcement and the drift is now expected to reach the target area in the fourth quarter of 1999.
The Company is also conducting vertical drilling from the lowest level of the mine in order to determine the depth of the Bolanos formation. This formation is the host rock from which sixty million ounces of silver were extracted at the Bolanos mine, located some 30 km from the Company's mine. The Bolanos formation will be developed if drilling determines that the formation can be economically exploited from the existing mine workings.
First Silver Reserve is a company focused on production and exploration of silver in Mexico. First Silver shares trade on the Toronto Stock Exchange under the symbol FSR.
On behalf of the Board of Directors
“Len Brownlie”
Director and Secretary
News Release FIRST SILVER RESERVE INC.
1999 – 5
Summarized Second Quarter Results
(expressed in US dollars)
June 30
1999 June 30
1998
A S S E T S
Cash and short-term deposits $ 514,280 $ 806,202
Other current assets 2,110,678 2,052,779
2,624,958 2,858,981
PROPERTY, PLANT AND EQUIPMENT 5,009,223 3,549,681
$7,634,181 $6,408,662
L I A B I L I T I E S
Current Liabilities 852,093 1,664,864
OTHER LIABILITIES 1,186,807 890,035
LONG - TERM DEBT 2,449,669 2,027,918
4,488,569 4,582,817
S H A R E H O L D E R S ' E Q U I T Y
SHARE CAPITAL
36,671,921 common shares without par value
859,734
820,032
SURPLUS (DEFICIT) 2,285,878 1,005,813
3,145,612 1,825,845
$ 7,634,181 $ 6,408,662
June 30
1999 June 30
1998
REVENUE
Revenue 5,520,684 6,164,693
OPERATING EXPENSES
Operations 4,086,700 3,258,172
Administration 609,571 896,507
Depreciation 265,367 279,718
4,961,638 4,434,397
NET EARNINGS BEFORE INCOME TAXES 559,046 1,730,296
Provision for income taxes 216,328 693,492
NET EARNINGS FOR THE PERIOD 342,718 1,036,804
SURPLUS (DEFICIT) – BEGINNING OF PERIOD 1,943,160 (30,991)
SURPLUS (DEFICIT) –END OF PERIOD 2,285,878 1,005,813
(Loss) Earnings Per Common Share for the period $0.01 $0.03
C$0.01 C$0.04 |
