Never a dull moment::
Attention Business Editors:
United Keno adds Clear Lake deposit to its Yukon silver, lead, zinc properties; Completes private placement
TORONTO, Oct. 19 /CNW/ - United Keno Hill Mines Limited (''United Keno'')
announced today that it has acquired the Clear Lake lead, zinc, silver deposit
in central Yukon from Energold Minerals Inc. (''Energold'').
The Clear Lake property, located approximately 65 miles east of Pelly
Crossing on the Klondike Highway and approximately 60 miles northwest of the
Anvil Range Mining deposits near Faro, is comprised of 636 claims upon which
considerable exploration has been completed.
Exploration on the property commenced in 1965 and accelerated between
1991 and 1993. Over the period, approximately 9,000 meters of diamond drilling
generated a drill-indicated mineral resource of 6.1 million tons grading 11.5%
zinc, 2% lead and 1 ounce of silver per ton at a cut-off grade of 7% combined
zinc-lead. At a cut-off grade of 5%, the size of the resource increases to
11.6 million tons grading 7.9% zinc, 1.4% lead and 0.80 ounces of silver per
ton.
With the acquisition of the Clear Lake deposit, and the Company's
acquisition of NDU Resources' Marg and Blende deposits in 1998, United Keno
has increased its silver, lead, zinc resource in the vicinity of its
processing facilities at Elsa (excluding the existing 30 million ounce silver
resource at Elsa) to approximately 34 million tons grading, overall,
approximately 5% zinc, 2.5% lead and 1.5 ounces of silver per ton, which
represents, in addition to the substantial base metal resource involved, an
increase of some 50 million ounces of silver in the ground. United Keno is
continuing to evaluate the economics of the central processing of silver/base
metal ores at its Elsa facilities and the economies of scale of substantially
increased throughput.
The purchase of the property was completed by the issuance to Energold of
5,200,000 common shares of United Keno, 2,000,000 warrants to purchase common
shares of United Keno at a price of $0.15 per share for two years, 1,000,000
warrants to purchase common shares of United Keno at a price of $0.20 per
share for three years and a secured demand promissory note in the amount of
$200,000 which is forgivable, in certain circumstances which are under
discussion.
At the same time, Energold completed the purchase of 1,300,000 common
shares of United Keno by way of private placement at $0.15385 per share. In
addition, Energold has agreed to provide United Keno with up to $2,000,000 in
working capital financing subject to certain terms and conditions relating to
security.
United Keno is pursuing senior secured project financing and the working
capital necessary to complete the preproduction rehabilitation and development
required to resume production from the Elsa Properties where annual production
of some 6,000,000 ounces of silver is forecast.
-0- 10/19/1999
For further information: Gerald J. Gauthier, President and Chief Executive Officer, (416) 360-5333
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