Company Press Release
Silver Standard Options Operating Mexican Silver Mine
VANCOUVER, BRITISH COLUMBIA--(BUSINESS WIRE)--March 6, 1998-- Silver Standard Resources(VSE:SSO. - news; NASDAQ:SSRIF - news) Silver Standard Resources Inc. is please to report an option agreement with IBANCE Division Minos S.A. de C.V. to acquire a 100 percent interest in the producing La Currita Mine, plant and related concessions located in southwestern State of Chihuahua in northern Mexico. The option agreement is subject to regulatory approvals.
Under the terms of the option agreement, Silver Standard must make staged cash payments totalling US$1.0 million by September 3, 2001. The vendors have agreed to a six month due diligence period during which Silver Standard will have the exclusive right to explore for additional silver resources, and to audit the vendors' records and financial statements. On or before completion of the due diligence period, Silver Standard may become operator of the mine, in which case Silver Standard will pay a net smelter royalty of 2 percent to the vendors during the option period.
On completion of the option period, Silver Standard has the right to purchase the assets and the concessions for US$2.5 million, subject to a net smelter royalty of 2 percent during the effective life of the concessions. This royalty may be purchased for US$500,000. All payments are subject to value added tax.
Since 1986, La Currita has produced approximately 250,000 tonnes of high-grade silver-gold mineralization from a vein exposed over 1,100 metres to a maximum depth of 80 metres. Hosted by volcanics and volcanoclastics, the vein system is over 10 metres wide and carries pyrite, acanthite, chalcopyrite, sphalerite, galena, native gold and electrum.
Drill inferred resources are conservatively estimated at 780,000 tonnes grading 220 grams of silver and 2.0 grams of gold per tonne, for a total of 7.8 million ounces of silver-equivalent. However, Silver Standard's consultant has estimated La Currita's geological resource potential in excess of 30 million ounces of silver-equivalent to a depth of 250 metres. The zone is open to the southeast and at depth.
As part of its due diligence, Silver Standard is planning an aggressive drilling program to confirm and upgrade silver resources, as well as to expand production and recoveries from the 100 ton-per-day operation. Silver production in 1998 is estimated at 225,000 ounces of silver-equivalent from the existing plant, with significant increases anticipated.
In other developments, Mexican authorities have advised Silver Standard that the company's La Morelense property under option in the State of Veracruz cannot be mined due to the region's environmental sensitivity. Silver Standard is seeking discussions with the Coordinator General of Mines to determine its options arising from such decision.
Silver Standard is a significant silver resource company with advanced exploration projects in the United States, Australia, Far East Russia, Bolivia and Mexico. Silver Standard's projects, owned and under option, have a combined total silver resource in excess of 170 million ounces of silver.
Silver Standard's objective is to now capitalize on the recent upward movement in the price of silver by advancing its significant resource projects, identified and accumulated since 1993, toward production. To achieve production during 1998, Silver Standard has secured the option on the La Currita property and is in active discussions to acquire another producing mine in Mexico.
The company is now proceeding with a prefeasibility study of its 100 percent-owned, 60 million-ounce Mudgee project in Australia which could be in production by late 1999/early 2000. Silver Standard is also continuing prefeasibility studies on the Lunnoe project in Far East Russia.
Silver Standard is well financed and will have in excess of $7.2 million in cash and cash equivalents upon closing of the private placement announced in February 1998.
The Vancouver Stock Exchange has neither approved nor disapproved of the information contained herein. The statements that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties which could cause actual results to vary considerably from these statements. The risks and uncertainties include those described in Silver Standard's Form 20F as amended.
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Contact:
Silver Standard Resources Inc.
Robert A. Quartmain, 604/689-3846
or
Silver Standard Resources Inc.
Paul LaFontaine, 604/689-3846
E-mail: invest@silver-standard.com |
