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Gold/Mining/Energy : Holmer Gold Mines -- Ignore unavailable to you. Want to Upgrade?

To: Hans Nonchen who wrote (693)	10/5/1999 8:06:00 PM
From: banco$	Respond to of 739

The JV agreement is certainly a boost for Holmer. It also allows Holmer to focus on the Cuban property since the JV partner is covering Timmins expenses. It is possible that HGM's Cuban property could come into production ahead of Timmins despite lack of progress this year; the Cuban property advanced through "independent feasibility study" stage. This part is especially nice..."assays of bulk samples from three pits adjoining drill holes have shown that the average grade of the deposit may be as much as 30 percent higher than that determined in resource estimates from the drill core." HGM's Loma Hierro deposit news release dated May 6, 1999: HGM 1999-05-06 Holmer Completes Feasibility Study On The First Silver Mine In Cuba TORONTO, ONTARIO--Holmer Gold Mines Limited of Toronto and its equal partner GeoMinera S.A. of Havana, Cuba are pleased to announce the completion of an independent feasibility study on the Loma Hierro Silver Project by Rescan Engineering / Hatch Associates of Vancouver. This study confirms that the project is economically viable with a good rate of return on investment based on an open-pit, vat-leach silver mine. The Loma Hierro silver deposit, which was discovered by Holmer in late 1994, is a 50:50 joint venture with Cuba's GeoMinera S.A.. During 1994 to 1997 Holmer conducted an extensive drilling program consisting of 164 diamond core holes and collected 380 tons of bulk samples for metallurgical studies. Silver mineralization is contained in two main rock types, laterites and saprolites. Resource estimates are based on diamond drill hole core samples only. However, assays of bulk samples from three pits adjoining drill holes have shown that the average grade of the deposit may be as much as 30 percent higher than that determined in resource estimates from the drill core. The resources are distributed in about 10 separate shallow deposits scattered over a 1 km2 area and contain approximately 9 million ounces of silver in the Indicated category and an additional 1.4 million ounces in the Inferred category. The initial mine plan is based on a mineable reserve in the main deposit which is estimated at 280,000 tons of ore containing 4.8 million ounces silver at 16.6 ounces of silver per ton, in two pits over a period of 2.1 years. Mining would be by conventional open-pit methods, requiring minimum blasting with a strip ratio of 1.8:1. The other known deposits could extend the mine life depending on plant performance and silver prices. The silver mineralization is mainly silver chloride minerals, which are amenable to cyanide leaching, yielding high (80 percent)recoveries in less than 4 days of treatment. Capital costs as a stand alone project have been determined at US$7.0 million including pre-production expenditures. An economic evaluation based on silver price of US$5.50 per ounce of silver indicated an internal rate of return of 57 percent and a payback period of 12 months. Cash production cost is about $2.20 per ounce of silver produced. Cash flow from the Loma Hierro operation during the first 12 twelve month period is estimated at C$0.12 per share of Holmer, based on a price of US$5.50 per ounce of silver and a production rate of 2 million ounces in the first year. Each additional US$0.50 increase in the price of silver per ounce adds C$0.03 per share to Holmer's cash flow. The company is currently discussing various production financing options with merchant banks. Based on successful financing and Cuban Government approval and permits in 1999, silver production could be achieved in 2000. Holmer is also reviewing a contractual agreement with a local mining company whereby Loma Hierro ore could be custom processed. This would significantly reduce Holmer's capital costs and enable production as early as third quarter 1999. The Loma Hierro silver project is located in the Pinar del Rio province of western Cuba, which hosts several gold and copper mines and deposits. FOR FURTHER INFORMATION PLEASE CONTACT: Holmer Gold Mines Limited Mr. Doug Baird (416) 360-7773 (416) 360-7954 (FAX) e-mail: info@holmergold.com website: holmergold.com