VANCOUVER, British Columbia, June 2, 2009 (GLOBE NEWSWIRE) -- Silverado Gold Mines Ltd (OTCBB:SLGLF) (Frankfurt:SLGL) (www.silverado.com) ("Silverado") has amended its pre-feasibility analysis of January 1, 2009 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, January 1, 2009" or "Technical Report." These amendments are being made in response to review comments by the British Columbia Securities Commission (BCSC). Certain material changes are shown below:
The Economic Analysis Chapter (Section 18.9) was clarified by the qualified person (QP) in the amended Technical Report to include: 1) an explanation of metal price forecasts; 2) analysis of depreciation and sunken costs; 3) a review of the effect of variable interest rates on the economic model; and 4) multiple scenarios for the Base Cash Flow case study.
In the Base Cash Flow case study, assuming an antimony (Sb) price of US$2.25 per pound and a gold (Au) price at US$700 per ounce, a seasonally operated 125 tons per day concentrating plant could ship stibnite concentrates during a five year mine development period. The net present value (NPV), using a 4.0 percent interest on investment, amounts to US$7,589,441. An NPV, using a 6.0 interest rate on investment, is US$6,478,071. The internal rate of return (IRR) is calculated to be 31.2 percent for the Base Cash Flow case study. Other alternative assumptions were modeled including 1) reduced metal recovery; 2) ore dilution; 3) reduced metal recovery coupled with dilution of ore. All of these scenarios generated IRR values ranging from 25.2 to 29.4 percent, and all indicated positive NPV values, and favorable return on investment. Price sensitivity assumptions were also further explored in the economic analysis, which confirmed that antimony drives the project.
The QP also chose to modify inferred Sb and Au resources estimates on the Pringle Bench, which results in amendments to Figure 17.10, Table 17.15 (page 103), Table 17.16 (page 107), and Table 1.3 (page 16), of the Technical Report which may be viewed on www.sedar.com, www.sec.gov/edgar.shtml or the Company's website, www.silverado.com. The changes were made upon further review of the distance between drill control points used in a polygonal analysis of the inferred resources on Pringle bench. As a result, inferred resources in the Nolan Creek area as reported in the Technical Report changed from 27,697 tons grading 12.26 percent antimony and 0.230 oz/ton gold to 24,077 tons grading 12.45 percent antimony and 0.245 oz/ton gold. This results in reductions of 12 percent and 8 percent of in-place inferred resources of antimony and gold respectively.
The measured reserve estimates on Workman's Bench, on which the pre-feasibility study was based, have not changed.
The amended inferred resource estimates for the Pringle Bench and Nolan areas are shown below:
Summary of Amended Inferred Antimony and Gold resources from 'A' and
'West' Zones, Pringle Bench
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Category Cut-Off Grade Quantity Grade Metal Grade Metal
(% Sb) (tons) (% Sb)(ton Sb) (oz/ton Au) (oz gold)
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'A' Vein
Inferred 4.0 737 29.13 214.7 0.113 83.4
'West' Vein 4.0 1,951 9.86 192.3 0.049 94.7
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Inferred
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TOTALS 4.0 2,688 15.14 407.0 0.067 178.1
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Notes:
-- The effective date of these resources is January 1, 2009;
amended June 1, 2009.
-- 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 is the combined
values of gold plus antimony expressed in terms of antimony
Silverado's amended, inferred lode mineral resources, Nolan Creek area
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Resource Cut-off grade Quantity Grade Metal Grade Metal
Category (% Sb) (ton) (% Sb)(ton Sb) (oz/ton Au) (oz Au)
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Inferred 4.0 24,077 12.45 2,997.6 0.245 5,894.7
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Notes:
-- The effective date of these resources is January 1, 2009;
amended June 1, 2009.
-- 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 is the combined
values of gold plus antimony expressed in terms of antimony
Other Amendments to the Technical Report made by the QP include: 1) the addition of permitting and regulatory information in Sections 4.3 and 18.5; 2) clarification of data presented in the Mineral Processing and Metallurgical Testing (Section 16); and 3) providing a project budget estimate for a 5,000 foot core drilling program that was recommended in Section 20 of the January 1, 2009 Technical Report. The drill program will seek to add further confidence to Sb and Au resource estimates on Workman's Bench and Pringle Bench.
Assumptions, Methods, and Parameters
The QP estimated mineral resources using the following steps:
* Personal inspection of both Workman's Bench lode-style and the Nolan Creek placer-style gold properties during 1994, 1999, 2004, and 2006 to 2008. * Database compilation and data validation. * Geological interpretation and modeling. * Compositing assay intervals to a common length. * Determination of average material density for both lode and placer 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. * Mineral resource tabulation and validation of the resource estimate.
Data Verification
* During numerous personal inspections of the Nolan Creek properties (2007 to 2008) the QP has observed sample collection and sample preparation practices for lode-style deposits. * On June 13 and 14 and September 28 and 29, 2008, the QP visited Nolan Camp and examined all significantly mineralized core intervals acquired from the 2007 and 2008 exploration 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. The QP 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 the QP 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, the QP 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.
Qualified Person
The information contained in this news release was 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.
Forward-Looking Statements
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