Silverado Announces Results of Preliminary Feasibility Study on Workman's
Bench Gold and Antimony Deposit at Nolan Creek
VANCOUVER, Jan. 5 /PRNewswire-FirstCall/ - Silverado Gold Mines Ltd. (the "Company" or "Silverado") SLGLF OTCBB, SLGL Frankfurt, www.silverado.com, is pleased to announce that the preliminary feasibility study on its Workman's Bench gold and antimony lode gold deposit at its Nolan Creek property in Alaska has been completed. The study was commissioned by the Company in September 2008, and was performed by Thomas K. Bundtzen ("Bundtzen") of Pacific Rim Geological Consulting Inc., an independent mining consultant. The study concluded that the Workman's Bench project is economically viable and also supports a mineral reserve calculation and updated mineral resource estimate on the property.
Workman's Bench is the Company's prime exploration target for a lode gold and antimony deposit in the southwestern part of the Solomon Shear Zone, which is located on the Company's Nolan Creek Property in Alaska.
The results of the study are reported in a NI 43-101 Technical Report entitled "Update of Mineral Resource and Reserve Estimates and Preliminary Feasibility Study, Workman's Bench Antimony-Gold Lode Deposit, Nolan Creek, Wiseman B-1 Quadrangle, Koyukuk Mining District, Northern Alaska", dated January 1, 2009 and prepared by Bundtzen. The Technical Report was filed today on SEDAR and will be available at www.sedar.com, on EDGAR at www.sec.gov/edgar.shtml and on the Company's website at http://www.silverado.com/.
Highlights of the Technical Report are as follows:
MINERAL RESOURCES AND RESERVES
An initial updated gold and antimony indicated mineral resource estimate for the Workman's Bench deposit was reported in a news release dated November 17, 2008, as corrected. As a result of further analysis, Bundtzen has concluded that the indicated mineral resource estimate in the Workman's Bench lode deposit as disclosed in the news release dated November 17, 2008 can be classified as probable mineral reserves in accordance with the CIM Definition Standards. There have otherwise been no material changes to the grades and quantities previously reported. The following table summarizes the mineral reserves for the Workman's Bench gold-antimony deposit, effective January 1, 2009.
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Reserve Cut-off Quantity Grade Metal Grade Metal
Category grade (ton) (% Sb) (ton Sb) (oz/ton Au) (oz Au)
(% Sb)
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Probable 4.0 42,412 28.00 11,880 0.408 17,300
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Notes:
- Rounding may result in some discrepancies.
- No processing recovery factors have been applied to these reserve figures.
- The unit ton refers to short tons.
- Cut-off grade is 4.0% Sb 'equivalent', which refers to the combined values of gold plus antimony expressed in terms of antimony alone
The following table summarizes the mineral resources for the Workman's Bench and Pringle Bench gold-antimony deposit, effective January 1, 2009.
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Reserve Cut-off Quantity Grade Metal Grade Metal Category grade (ton) (% Sb) (ton Sb) (oz/ton Au) (oz Au) (% Sb)
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Inferred 4.0 27,697 12.26 3,397 0.230 6,372
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Notes:
- Mineral Resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
- Rounding may result in some discrepancies.
- No processing recovery factors have been applied to these resource figures.
- The unit ton refers to short tons.
- Cut-off grade is 4.0% Sb 'equivalent', which refers to the combined values of gold plus antimony expressed in terms of antimony alone.
Assumptions and Methods
Bundtzen included the following steps during calculation of the indicated resources and probable reserves at Workman's Bench:
- personal inspection of Workman's Bench lode style gold property during 2007 - 2008;
- database compilation and data validation;
- geological interpretation and modeling;
- compositing assay intervals to a common length;
- determination of average material density for lode properties;
- analysis of grade variability;
- polygonal estimation of grade by compositing of sample assay information taken within designated widths and lengths of mineralized zones;
- assignment of appropriate cut off grades, the lowest grade that can be mined economically;
- classification of confidence in the estimates with respect to CIM
(2005) guidelines, and;
- mineral resource and reserve tabulation and validation of the resource estimate and reserve calculation.
Data Verification
During numerous personal inspections of the Nolan Creek properties (2007 to 2008) Bundtzen observed sample collection and sample preparation practices for lode-style deposits.
On June 13 and 14 and September 28 and 29, 2008, Bundtzen visited Nolan Camp and examined all significantly mineralized core intervals acquired from the 2007 and 2008 exploration drilling of the Workman's Bench property. A total of 124 mineralized intervals were examined. The analytical data was compared with each of the mineralized zones to confirm the elevated antimony and gold values in the sampled intervals.
Drill core intervals were checked through re-assay and inspection. Bundtzen is satisfied that the sampling and analysis of drill core was carried out in a sound manner.
Selected field duplicates of sampled intervals, two from underground channels, and one from a trench, were submitted by Bundtzen to an umpire laboratory (Alaska Assay Laboratories LLC) to check analytical results from ALS Chemex. In as much that the samples are collected by different individuals at different times and analyzed by different labs, Bundtzen judges that results from this limited comparison indicate acceptable levels of bias and accuracy for gold and antimony values and confirm the existence of mineralization.
RESULTS OF PRELIMINARY FEASIBILITY STUDY
Bundtzen completed the preliminary feasibility study in order to evaluate the merits of extracting antimony and gold from Workman's Bench using the reserve and resource base summarized above. The conceptual work plan would involve the selective underground extraction of high quality vein mineralization, processing of ore with a nearby surface plant using gravity (and possibly flotation) technologies, recovering most of the gold value on site at Nolan
Creek, and shipping a metallurgical grade stibnite concentrate to overseas buyers, either Asian (China) or European (Rotterdam, Netherlands) markets. The preliminary feasibility study used a wide variety of economic data to produce projected capital and operating costs estimates, environmental and social considerations, mining methods, processing technologies, permitting
issues, taxation issues, and commodity price trends, all of which became components of the Nolan lode development economic model.
Assuming an antimony price of $2.25/lb and a gold price at $700/ounce, and process recovery rates of 85% for antimony and 90% for gold, a seasonally operated 125 tpd concentrating plant could ship stibnite concentrates during a five year period and make a profit of about $27 million over the life of the operation. The mine would pay back capital costs in the third or fourth
quarter of the third year of development. Antimony, which accounts for 77 percent of the value of the product under the mining scenario, would clearly drive the project although gold (23 percent of total value) is a significant byproduct. Gold bars would be produced at the mine site thus creating early cash flow. Maintaining stibnite (ore of antimony) concentrate quality for
overseas markets is very important to the success of the proposed development. Preliminary metallurgical testing of a bulk sample from the Workman's Bench Lode shows high recovery rates of gold and antimony. Other impacting factors include wall rock stability underground permitting issues, and metal price trends of both antimony and gold.
The mine plan contemplates deploying standard cut and fill mining methods that would take place for five months during the winter, followed by a three month period of ore processing. When in full production the mill will process up to 12,500 tons of ore per year which will yield up to 4,590 ounces of gold and 5,000 tons of stibnite concentrate. Stibnite concentrates would be shipped during late summer and early fall of each year.
Cautionary Notes to U.S. Investors
U.S. investors are cautioned that the term "inferred resources" as used herein, is recognized by NI 43-101 under Canadian regulations, but is not recognized by the SEC. US investors are advised that NI 43-101 standards and the SEC's Industry Guide 7 standards are substantially different, and that many of the terms and concepts set out in and required to be disclosed by NI
43-101 as information material to the Company are neither recognized by the SEC nor included in or compliant with Industry Guide 7 standards.
Qualified Person
The mineral resource estimates and mineral reserves contained in this news release were prepared by Thomas K. Bundtzen, P.Geo, BS, MS, CPG-10912, ABSLN # 279639, President of Pacific Rim Geological Consulting, Inc. of Fairbanks, Alaska, who is independent of the Company as defined by NI 43-101. Bundtzen is a Certified Professional Geologist with the American Institute of Professional Geologists. Bundtzen is a "Qualified Person" as defined by NI 43-101 and also qualifies under the rules stated by the U.S. Securities and Exchange Commission ("SEC"), and has verified the data contained in this news release for accuracy.
About the Company
The Company is an exploration stage company focused on the exploration of gold properties, with some past production, and the development of new environmentally friendly low-rank coal water fuel technology. The Company has gold properties located throughout Alaska, which include a 100% interest in numerous mining claims located on the Nolan Creek property. Please visit http://www.silverado.com/.
The Company is developing low-rank coal water fuel that is designed to be produced from low-rank coal and processed into an environmentally friendly oil substitute. Silverado Green Fuel Inc. is a wholly owned subsidiary of its publicly traded parent, Silverado Gold Mines Ltd. For more information about Silverado Green Fuel Inc., please visit http://www.silveradogreenfuel.com//.
Forward-Looking Statements
This news release may contain, in addition to historical information, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this news release that are forward-looking statements are based on the current expectations, beliefs, assumptions,
estimates and forecasts about the Company's business and the industry and markets in which it operates. Such forward-looking statements involve risks and uncertainties regarding the market price of gold, availability of funds, government regulations, common share prices, operating costs, capital costs, outcomes of test mining activities and other factors. Forward-looking
statements are made, without limitation, in relation to operating plans, property exploration activities, including test mining activities, availability of funds, environmental reclamation, operating costs and permit acquisition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential", or "continue", and the negative of such terms or other comparable terminology. Actual events or results may differ
materially. In evaluating these statements, you should consider various factors, including the risks detailed in the Company's filings with the Canadian Securities Authorities and the US SEC. These factors may cause the Company's actual results to differ materially from any forward-looking statement. Except as required by applicable securities laws, the Company disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
SOURCE Silverado Gold Mines Ltd.
Silverado Gold Mines Ltd.: Mailing Address: Suite 1820 - 1111 West Georgia
St., Vancouver, BC, V6E 4M3, Canada; Email: Investor Relations:
ir@silverado.com, Public Relations: pr@silverado.com; Telephone Numbers:
Corporate: (604) 689-1535, Facsimile: (604) 682-3519, Toll Free:
1-800-665-4646 (Canada and USA only); Trading Symbols: OTC BB - SLGLF,
FRANKFURT - SLG
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