Subject:
Stockwatch: United Keno Hill Mines Ltd - News Release
Date:
Tue, 19 Aug 1997 08:18:18 -0700
Type A water licence issued
United Keno Hill Mines Ltd UKH
Shares issued 10,296,280 Aug 18 close $0.61
Tue 19 Aug 97 News Release
Mr Stephen Powell reports
The Yukon Territory Water Board has issued a Type A water licence to the
company. The licence, the terms of which are substantially as applied for,
has been forwarded to the Minister of Indian and Northern Affairs Canada
for approval.
Environmental permitting in the form of a water licence will now enable the
company to secure the production financing necessary to permit the
resumption of commercial production at its silver-lead-zinc mines in the
Yukon.
The company embarked on its Reserve Development Strategy in June 1994 with
the objectives of re-establishing an adequate mineral inventory, of
identifying and implementing strategies to lower mining costs and increase
production efficiencies, and of securing a water licence to permit the
recommencement of production.
A two and one-half year exploration program succeeded in trebling the
mineral inventory present. Mineral resources now stand at 944,000 tons
grading 30 oz of silver per ton, 4.8% lead and 3.9% zinc, the highest level
in the company's 50-year history. Within that resource, a mineable reserve
of 520,000 tons has been established grading 33 oz of silver per ton, 6.6%
lead and 5.0% zinc. The mineable reserve is sufficient to provide for a
three-year mine plan and adjacent mineral resources are expected to be
sufficient to provide an initial mine life of five years.
Mine planning and a feasibility study completed in October 1996 incorporate
modern, trackless mining methods with development off-vein in competent
quartzite. In that study, mining costs are forecast to decline
substantially from historic levels, production rates are forecast to
improve considerably and profitable operations are indicated. Yukon Gold
and Mineral Development is in the process of completing an equity financing
for the company. In conjunction with those financing activities, Yukon Gold
has identified opportunities for substantial reductions in projected
capital and operating costs and is now revising mine and operating plans to
incorporate those improvements.
Minsterial approval of the water licence will deliver the third object of
the Reserve Development Strategy and permit the company to complete the
production financing required to complete surface rehabilitation and mine
development. Endeavour Financial, the company's financial advisers, is now
preparing to secure those funds. Production will be resumed following a
pre-production period of four to six months.
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