NEWS RELEASE
Independent Geological Report Received Recommending Slovakian Silver Project.
June 1,1998 News Release #07-98
Management of Porcher Island Gold Corp. has received the geological consultants' report on the Strieborna Vein Silver Project. Resource estimates, property infrastructure and economics appear to be favorable.
The independent geological report written and presented by Hans Madeisky, PhD., P.Geo. and Ariadna Chernavska, PhD., PGeo. is a result of a property visit in March, review of mining records, reports and engineering studies. Laboratory analyses (by Chemex Labs of Vancouver B.C.) corroborate the grades from channel sampling and drill intersections by Zelba a.s., a state owned Slovakian company. Zelba a.s. has an agreement with Cessana Capital Corp. which has agreed to vend the project to Porcher Island Gold Corp., pending regulatory acceptance.
The Summary from the geological report states:
"The Strieborna vein Silver deposit is located at the northern edge of the old mining town of Roznava in the southern foothills of the Spis-Gemer Ore Mountains of east Slovakia. In addition to the Strieborna vein, the property includes the Maria Vein (a past producer now on care and maintenance), and three other siderite-quartz-sulphide veins, the Mayer, Podlozna, and Pallag veins. The property consists of two mining leases and two exploration leases (totalling approximately 160 ha), and also includes the facilities of the Maria mine and Roznavska Bana mill at the nearby village of Nadabula. The property is owned by Zelba a.s., a Slovak mining and manufacturing company. Pursuant to certain agreements, Porcher Island Gold Corp. has the right to earn a 75% interest in the property and become the operator by providing the funds to put the Strieborna deposit into production.
Since its discovery in 1981, the Strieborna vein has been explored underground by over 3000 m of drifts on four levels. Drifting has defined a total strike length of 1300 m, and surface and underground drilling have defined a vertical extent of 500 m. Strieborna is silver bearing siderite-quartz-sulphide vein hosted in Early Palaeozoic rocks, mainly porphyroids and metaclastics. The vein strikes northeasterly, has a variable dip from 50 degrees NW to subvertical, and varies in
thickness from 0.5 m to 7.1 m, averaging about 2.5 m. The main minerals of economic interest are silver and copper bearing tetrahedrite, and the siderite gangue. Based on 300 channel samples and 14 drill intersections, independent consultants GEONEVEX spol.s.r.o., have calculated the following indicated resource for the Strieborna vein silver deposit;
1,245,000 tonnes grading 400.6 Grams of Ag. 1.761% Cu. and 33.65% Fe. at a cut-off grade of 210 g/t Ag
About 30,000 tonnes of "development ore" from the drifts and raises in the Strieborna Vein were milled and processed at Roznavska Bana, yielding 3000 tons of tetrahedrite concentrate. Fifty tonnes of this concentrate were used in various metallurgical tests. The rest was sold to a Peruvian copper smelter.
Above level 8, there is an indicated resource of approximately 163,000 t at about 746 g/t Ag, which at the current capacity of the mine could sustain about one and a half years of production. In preparation for production, the level was driven parallel to the Strieborna vein, a 40 m raise and about 130 m of sub-level drift with three ore passes have been completed, this would be an obvious target for early production from the Strieborna vein.
To support a production decision for the Strieborna deposit, it is recommended that the indicated resource above level 8 be upgraded to a measured resource by means of additional sampling along the perimeters and through the centers of the existing resource blocks. About 600 m of new raises and drift are needed. Engineering studies should be undertaken to determine the optimal circuit and capacity for the Roznavska Bana facility, and to conduct a cost/benefit analysis of shipping tetrahedrite concentrate to overseas smelters vs. cleaning this concentrate in a hydro-metallurgical circuit by removing Sb, As, and Hg, and selling the cleaned concentrate to European smelters.
Using this new information, the economic feasisbility of mining the Strieborna vein silver deposit should be re-evaluated from the perspective of the contemplated business arrangement between Porcher Island Gold Corp. and Zelba a.s. The mine will have to continue on care and maintenance status for the six months required to complete this work. The estimated budget for maintaining the mine and carrying out the sampling and the engineering studies is CN$ 1,000,000."
The following information was also extracted from this report:
The two resource blocks containing the following indicated resource, block # 802 (67,000 t at 422 g/t Ag, 1.726% Cu and 29.42% Fe) and block # 803 (96,000 t at 973 g/t Ag, 4.342% Cu and 37.45% Fe) lie above level 8. The weighted average of this indicated resource is approximately 163,000 t @ about 746 g/t Ag. 3.26% Cu and 34.14%Fe.
To upgrade the classification of these blocks from indicated resource to measured resource, it will be necessary to drive seven raises from level 8 to level 7, and drift along level 7, so that additional samples may be obtained from the Strieborna vein.
The average width of these two mineralized blocks is 4.8 m containing approximately 125 million grams of Ag or 3.6 million ounces, plus 5,300 t Cu., and over 50,000 t Fe. The Fe (siderite) can be sold to a local iron ore processor.
The report of the Mining Engineer, George Heard, P.Eng. is under review and will be announced shortly
ON BEHALF OF THE BOARD OF DIRECTORS
OF PORCHER ISLAND GOLD CORPORATION
"Lawrence D. Barr"
Lawrence D. Barr
President
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