Magnus Bratlien, President of Huldra Silver Inc., announces that the Company has received a Mining and Reclamation Plan for its Treasure Mountain Property
Magnus Bratlien, President of Huldra Silver Inc., announces that the Company has received a Mining and Reclamation Plan for its Treasure Mountain Property, Tulameen River Area, B. C., Canada. This Plan was prepared for the Company by Mr. Al Beaton, P. Eng. (Mining) for mine permitting and planning purposes and includes a preliminary economic assessment. Implementation of the planned operation is subject to financing and permitting.
Mr. Beaton, P. Eng., proposes an underground mine that will extract Indicated and Inferred Resources located in the hanging wall portion of the Treasure Mountain mine. Those resources are defined in the Company’s recent NI 43-101-compliant technical report as follows:
| Indicated | 38,114 tonnes (hanging wall above Level 3) with 32.76 oz/tonne silver, 5.92% lead and 5.09% zinc |
| Inferred | 50,990 tonnes (hanging wall above Level 3) with 29.66 oz/tonne silver, 3.20% lead and 4.90% zinc. |
The Mine Plan is based on the above resources diluted by 20%. The figures for the diluted tonnage are:
| Indicated | 45,737 tonnes with 27.30 ounces per tonne silver, 4.93% lead and 4.24% zinc and contained metal content of 1,248,620 ounces silver, 2255 tonnes lead and 1939 tonnes zinc |
| Inferred | 61,188 tonnes with 24.72 ounces per tonne silver, 2.67% lead and 4.08% zinc. with a metal content of 1,512,567 ounces silver, 1634 tonnes lead and 2496 tonnes zinc. Further exploration in the mine and mine area is expected to increase this volume of ore. |
The mine plan assumes one year of pre-production development work to prepare the mine for production. That work will upgrade certain portions of the Resources from Indicated to Measured and from Inferred to Indicated status and will provide information concerning the mining characteristics of the Treasure Mountain mineral zone. Mineral resources that are produced in pre-production work will be stockpiled for test work and later processing.
Actual mining will be scheduled in years two through five, at 24,000 tonnes per year.
For planning purposes metal values are projected to be silver US $10/oz, lead and zinc, US $0.50/pound and an exchange rate of CAD $1.15. Metal recoveries are, on the basis of past test work, estimated to be 95% but for planning purposes silver and lead recoveries are calculated to be 85% and zinc, 75%. The ore will be processed at the mine site in a gravity separation circuit capable of operating at 20 tonnes per hour. The resulting composite concentrate will be trucked offsite to an existing concentrator in British Columbia with capacity of 100 tonnes per day where lead and zinc concentrates will be produced. Marketing options for these concentrates are being investigated but the mine plan assumes that concentrates will be shipped to the nearby Trail smelter.
Local personnel and contractors will be employed where possible and a 20 person camp will be erected close to the mine. In consideration of the difficult winter operating conditions, mining operations will be confined to a six to seven month period each year with milling operations possibly being extended by processing stockpiled ores.
The Company’s consulting mining engineer has obtained quotations from potential suppliers that indicate that the capital cost of purchasing and installing the proposed gravity separation circuit will be “…less than $1 million CAD”. Total capital requirements in Year 1 and Year 2, prior to generation of cash flow, including provision for a reclamation bond, purchase of equipment, and mine rehabilitation and development, are estimated to be $4,800,000.
The following figures are based on the assumption that capital and working capital will be provided by equity financing. Direct mining costs are projected to be $80/tonne delivered to the portal of the mine; gravity mill processing, $20/tonne; administration including engineering, cookery, camp, communications and safety, $15/tonne; other facilities $10/tonne; tailings disposal $5/tonne; totaling an estimated $130/tonne. Offsite concentration and separation is expected to cost $15/original tonne and total operating costs including two stages of trucking, firstly of gravity concentrates and then of final concentrates to deliver the lead and zinc products to a market, are projected to total $185/original tonne. Based on the foregoing, an operating profit of $154.31/tonne should be realized. Annual operating profit, before taxes and extraordinary expenses, is estimated to be 24,000 X $154.31 = $3,703,440 and for a four year operation, $14,813,760.
This news release contains forward-looking statements and assumptions concerning the Company’s Treasure Mountain property including current (2008) resource estimates of amounts of silver, lead and zinc that will be found to be present in the mineral deposits, and the assessment that the deposit may, subject to costs, metal prices and any other relevant factors, be profitably minded at some point in the future. Mineral resources that are not mineral reserves do not have demonstrated economic viability. This economic assessment is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the preliminary assessment will be realized. 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 the Company who accepts responsibility for its contents. The technical information in this news release has been reviewed and approved by the Company’s 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.”