United Keno Hill Mines Limited
10/5/00 -
Pacific Cart Services Ltd. To Increase Keno Stake
Retains Precious Metals Consulting Firm
TORONTO, Oct. 5 /PRNewswire/ - Pacific Cart Services Ltd. (OTC BB : PFCS) announced today it
is seeking to increase its investment in United Keno Hill Mines Ltd. (Keno) of Toronto. (UKH:TSE).
The company is working diligently with interested parties to provide Keno with working capital to
reorganize Keno's financial balance sheet and to identify US$10,000,000 in mine financing. Keno's
studies have determined that this amount is required to resume commercial production of silver on a
profitable basis at its historic silver-lead-zinc Elsa Properties in central Yukon.
In addition, Pacific Cart Services Ltd. is pleased to announce it has retained the investment banking
services of CPM Group of New York. CPM Group is recognized as a leader in precious metals market
research and financial consulting, and will act in an advisory capacity to the corporation as it seeks to
secure mine financing and progress the project to production.
At present, Pacific Cart Services Ltd. holds loans convertible into 1,750,000 shares of common stock in
Keno representing approximately 4% of the issued capital.
Pacific Cart Services Ltd. has acquired detailed knowledge of the Elsa project over the past 2 years.
Management is confident that with the requisite financing they have the team assembled to bring the
Keno project through the reorganization and into pre-production within several months.
The rationale behind management's interest in Keno lies in its opinion that Keno's deposit can be
profitably exploited even at present silver markets, coupled with its view that the supply/demand profile
of the world silver market suggests that prices of this metal may rise significantly in the next few years.
This position is shared by some of the most sophisticated investors in the world. The silver market has
seen the supply of newly refined silver entering the market from mine production, scrap, and other
sources fall short of fabrication demand year over year since 1990. The shortfall has been made up
from a finite inventory.
United Keno Hill Mines Ltd. owns a 60 square mile mining camp, containing 65 known deposits, which
have produced 215 million ounces of silver since 1914. Proven reserves are the highest in the
company's history. At current prices, the mineable reserve would be projected to generate
US$73,000,000 in Net Smelter Return based on a tight 33-month production schedule. The exploration
potential of the site remains excellent with less than 20% of the host to the silver mineralized veins
having been explored.
Production is planned at an initial rate of 500 tons per day at a site operating cost of US$103 per ton
and a total cash operation cost of US$112 per ton. The year one average NSR is projected at US$203
per ton. Production in year one is forecast at 6,000,000 ounces of silver at an average cash cost of
US$3.25 per ounce.
Pacific Cart Services Ltd. has played a positive role in the maintenance of United Keno Hill Mines
over the last year and looks forward to participating in its successful future. SOURCE Pacific Cart
Services Ltd.
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