TO ALL, news release. paraphrased follows:UNITED KENO HILL MINES LIMITED
TORONTO, May 20 / - United Keno Hill Mines Limited today announced
results for the year ended December 31, 1996. For the year, the Corporation
experienced a net loss of $1,967,000 or $0.15 per share compared to the
restated net income of $957,000 or $0.08 per share recorded in 1995. Mining
operations continued suspended in 1996 and no operating revenues were
generated.
During the year, operating expenses aggregated $2,504,000
(1995-$2,121,000) and $5,098,000 was expended on reserve development and
pre-production activities (1995-$8,654,000). Secured debentures and preferred
shares issued in 1995 were redeemed during the year for $19,200,000.
During the year, the Corporation continued to focus on completing the
Reserve Development Strategy and achieved significant progress in its plans to
recommence commercial production from its Elsa, Yukon silver-lead-zinc
properties.
Following three years of research and preparation, an application for a
Class ``A'' production water licence and a closure plan for the Elsa
Properties were filed with the Yukon Territory Water Board in July. A positive
Final Screening Report was issued under the Canadian Environmental Assessment
Act on March 26, 1997 by The Department of Indian Affairs and Northern
Development, Northern Affairs Program. Yukon Region and the Water Board
conducted a public hearing in connection with the application on April 9,
1997. The Corporation awaits the outcome of its determination,
Strengthening relations with the neighbouring First Nation of Na Cho Nyak
Dun resulted in the execution of a Framework Agreement in May and the
Corporation and the First Nation are now nearing completion of an Impacts and
Benefits Agreement to define the First Nation's role in recommenced
production.
The 1996 exploration program was completed in October and the
interpretation of its results has permitted a substantial increase in the
Corporation's mineral resources. Total geologic resources were increased by
nearly 50% and now stand at 944,064 tons grading 29.96 ounces of silver per
ton, 4.82% lead and 3.86% zinc, and represent over 33,000,000 ounces of silver
and silver equivalent, the highest level in the Corporation's history.
Following the completion of a study of the feasibility of recommenced
production by Rescan Engineering Ltd. in October, detailed mine plans were
prepared and a mineable reserve of 470,130 tons grading 34.46 ounces of silver
per ton, 6.96% lead and 5.53% zinc has been established. Detailed planning of
the mining of that reserve at a rate of 500 tons per day has resulted in
projected operating costs of approximately US $96.00 per ton and an average
net smelter return of approximately US $165.00 per ton.
The capital cost of the rehabilitation, development and equipment
necessary for the recommencement of commercial production is estimated to be
approximately $13,000,000. It is estimated that working capital of
approximately $10,000,000 will be required to complete pre-production
activities and sustain the Corporation until positive cash flow is generated.
Pre-production activities can be completed and production can be resumed
approximately five months following the receipt of production financing. The
Corporation and its financial advisors are now attempting to secure the
necessary production financing.
At recent meetings of the Board of Directors of the Corporation, Robert
N. Granger, Q.C., and John D. Harvey were appointed directors of the
Corporation to fill recent vacancies.
Mr. Granger has extensive experience in the practice of resource law and
recently served as Chairman and Chief Executive Officer of a major Canadian
mining corporation. Mr. Harvey has extensive experience in the exploration and
development of mineral deposits and has held senior executive positions with
major Canadian mining corporations.
The Corporation welcomes the combined experience of such prominent
members of the Canadian mining industry and the strength they will provide to
the Board. |
