Huldra Silver Inc. announces it has received a technical report entitled “Technical Report, Resource Estimation, Mining and Reclamation Plan and Economic Evaluation, Treasure Mountain Mine, Tulameen River Area, British Columbia
Magnus Bratlien, president, Huldra Silver Inc., announces that the company has received a technical report entitled “Technical Report, Resource Estimation, Mining and Reclamation Plan and Economic Evaluation, Treasure Mountain Mine, Tulameen River Area, British Columbia” dated June 15, 2009, revised July 2, 2009, prepared by independent consultants and Qualified Persons, Erik Ostensoe, P. Geo., G. H. Giroux, P. Eng. and A. J. Beaton, P. Eng. (Mining). This report includes a disclosure of Resources and a current Resource Estimation and Economic Evaluation and is neither a pre-feasibility study nor a feasibility study.
The historic Treasure Mountain property, 100% owned by Huldra Silver Inc., is located 28 km northeast of Hope, B. C., has been explored by Huldra since 1980 and comprises more than 2700 metres of underground workings on four levels, six raises and several drill holes. A Resource Estimation by Giroux Consultants Ltd. dated May 29, 2009, was based on a 2007 program of underground chip sampling of parts of Level 1 and Level 2, combined with historic sample data from a development program in 1987 – 1989. Resources were estimated at cut-off grades from 1.0 to 45.0 ounces silver per ton. A Total Vein Indicated Resource, estimated at an 11.02 ounces silver per tonne (10.0 oz silver per ton) cut-off grade, was reported as 33,000 tonnes with 26.68 ounces silver per tonne, 4.16% lead and 3.80% zinc, containing 880,000 ounces silver, 3,030,000 lbs. lead and 2,760,000 lbs. zinc. Total vein Inferred Resources, estimated at the same cut-off grade (11.02 ounces silver per tonne) were reported as 120,000 tonnes with 29.76 ounces silver per tonne, 2.79% lead and 4.36% zinc, containing 3,580,000 ounces silver, 7,370,000 lbs. lead and 11,540,000 lbs. zinc. [Note that Inferred Resources are based on geological evidence, limited sampling and reasonably assumed, but not verified, geological and grade continuity, and must be excluded from estimates forming the basis of feasibility or other economic studies.]
The Total Vein Indicated and Inferred Resources are presented in the following tables:
TREASURE MOUNTAIN – TOTAL VEIN INDICATED RESOURCE
| Cutoff (Ag oz/t) | Tonnes > Cutoff (tonnes) | Grade > Cutoff | Contained Metal | ||||
| Ag (oz/t) | Pb (%) | Zn (%) | Ozs Ag | Lbs Pb | Lbs Zn | ||
| 1.0 | 75,000 | 13.3 | 2.48 | 2.84 | 1,100,000 | 4,100,000 | 4,700,000 |
| 5.0 | 52,000 | 18.1 | 3.26 | 3.40 | 1,040,000 | 3,740,000 | 3,900,000 |
| 10.0 | 33,000 | 24.2 | 4.16 | 3.80 | 880,000 | 3,030,000 | 2,760,000 |
| 15.0 | 21,000 | 30.7 | 4.91 | 4.40 | 710,000 | 2,270,000 | 2,040,000 |
| 20.0 | 15,000 | 36.3 | 5.75 | 5.01 | 600,000 | 1,900,000 | 1,660,000 |
| 25.0 | 10,000 | 42.3 | 6.62 | 5.73 | 470,000 | 1,460,000 | 1,260,000 |
| 30.0 | 7,200 | 49.2 | 7.66 | 6.21 | 390,000 | 1,220,000 | 990,000 |
| 35.0 | 5,000 | 56.6 | 8.91 | 6.52 | 310,000 | 980,000 | 720,000 |
| 40.0 | 3,600 | 64.1 | 9.73 | 7.02 | 250,000 | 770,000 | 560,000 |
| 45.0 | 2,900 | 69.0 | 10.10 | 7.54 | 220,000 | 650,000 | 480,000 |
| TREASURE MOUNTAIN – TOTAL VEIN INFERRED RESOURCE | |||||||
| Cutoff (Ag oz/t) | Tonnes > Cutoff (tonnes) | Grade > Cutoff | Contained Metal | ||||
| Ag (oz/t) | Pb (%) | Zn (%) | Ozs Ag | Lbs Pb | Lbs Zn | ||
| 1.0 | 235,000 | 15.9 | 1.93 | 3.09 | 4,110,000 | 10,000,000 | 16,020,000 |
| 5.0 | 161,000 | 22.0 | 2.48 | 3.86 | 3,900,000 | 8,800,000 | 13,710,000 |
| 10.0 | 120,000 | 27.0 | 2.79 | 4.36 | 3,580,000 | 7,370,000 | 11,540,000 |
| 15.0 | 92,000 | 31.4 | 3.10 | 4.95 | 3,180,000 | 6,280,000 | 10,040,000 |
| 20.0 | 68,000 | 36.2 | 3.57 | 5.82 | 2,720,000 | 5,350,000 | 8,720,000 |
| 25.0 | 42,000 | 44.6 | 4.81 | 6.03 | 2,070,000 | 4,450,000 | 5,590,000 |
| 30.0 | 30,000 | 51.4 | 6.04 | 6.95 | 1,700,000 | 4,000,000 | 4,600,000 |
| 35.0 | 25,000 | 55.5 | 6.66 | 7.21 | 1,530,000 | 3,670,000 | 3,970,000 |
| 40.0 | 21,000 | 58.7 | 7.04 | 7.37 | 1,360,000 | 3,260,000 | 3,410,000 |
| 45.0 | 16,200 | 63.3 | 7.56 | 7.73 | 1,130,000 | 2,700,000 | 2,760,000 |
A non-compliant Resource Estimate, disclosed in News Releases dated August 15, 2008 and January 14, 2009 and subsequently withdrawn by NR dated April 20, 2009, disclosed Resource estimates that were not estimated in accordance with NI 43-101 standards. The current Resource Estimate is compliant with NI 43-101 and discloses fewer Indicated Resources and contained metals due to application of different parameters and mathematical analyses.
The Company has submitted an application for a Small Mine Operating Permit to the Ministry of Energy, Mines and Petroleum Resources but the Treasure Mountain Mine is not in a development or production stage. Subject to permitting, equity financing and further studies, the Mining and Reclamation Plan is based on a one year program of pre-production mine and plant development followed by extraction and processing of the Indicated Resources in a conceptual small underground mine and on-site gravity concentration plant at the rate of 135 tonnes per day in a seasonal, six to eight month, operation to process approximately 24,000 to 32,400 tonnes annually. A mixed silver-lead-zinc product will be produced and then be trucked off-site to a second stage flotation plant for further up-grading and production of a silver-lead and a zinc concentrate. The concentrates will then be shipped to a smelter or sold. The work force will include approximately twenty employees. The Capital Cost for mine development, site preparation, mill construction and flotation plant upgrade and reclamation bond is estimated to be $5.1 M.
A Preliminary Economic Assessment of the possible viability of production from the Treasure Mountain mine presented in a News Release dated January 14, 2009, was based on non-compliant resources and was withdrawn by NR dated April 20, 2009. The current Economic Evaluation replaces the January 14 economic assessment and considers only the Indicated Resource. Capital, operating costs and earnings are estimated in CAN $, metal prices are quoted in US $ and the evaluation assumes equity financing, first stage gravity separation ratio of 2:1, flotation stage, 5:1, 85% recovery of silver and lead and 75% recovery of zinc, and processing cost of CAN $218/tonne. It also assumes parity of the CAN $ and US $ and considers the economics of silver priced at US $10, $12, $14 and $16 per ounce and lead and zinc priced at US $0.60 per lb. Costs do not include head office, taxes and insurance.
Much of the difference in operating costs between the January 14, 2009 estimate of $185/tonne and the current estimate of $218/tonne is due to the more conservative forecast of the gravity plant operation in which 50% of the mill feed, rather than 25%, will be forwarded to the flotation plant, with the result that a greater volume will have to be trucked for further processing.
When a base case operating estimate is prepared using a silver price of $12 (USD), a positive cash flow of about $138/tonne is predicted. If that margin were to be maintained, the Indicated Mineral Resource could earn about $4.5 M before nonoperating charges including head office, taxes and insurance. Earnings are particularly sensitive to exchange rates and silver prices: for instance, with the CAN
$ at par with the US$, operating profits will rise or fall by $22.70 per tonne for each $USD 1.00 change in the per ounce silver price. Property exploration and upgrading of Inferred Resources to Indicated Resources may result in extending the life of the mine.
The complete Technical Report will be posted on the Company’s website (www.huldrasilver.com) and on SEDAR.
This news release contains forward-looking statements and assumptions concerning the Company’s Treasure Mountain property, including current (July 2009) resource estimates of amounts of silver, lead and zinc that will be found to be present in the mineral deposit, and the assessment that the deposit may, subject to costs, metal prices and any other relevant factors, be profitably mined at some time in the future. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. These forward-looking statements are subject to a variety of risks and uncertainties which could cause actual results to differ materially from those reflected in the forward-looking statements.
On behalf of the Board of Directors
“Magnus Bratlien”
Magnus Bratlien,
President
The foregoing News Release was prepared by Magnus Bratlien, the President and a Director of Huldra Silver Inc. who accepts responsibility for its contents. Technical information in this news release has been reviewed and approved by the Company’s Independent Qualified Persons, Erik A. Ostensoe, P. Geo., and Al Beaton, P. Eng. (Mining).
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release and neither approves nor disapproves of the information contained herein.