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 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)
-------------------------------------------------------------------------
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)
-------------------------------------------------------------------------
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
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
