Iron Mountain Survey

[Tackler]

Hi Ho Hi Ho off to work they go...

Hi Ho Silver begins Carmi exploration; grants options

2006-09-08 16:55 ET - News Release

Mr. Frederick Fisher of Hi Ho reports

HI HO SILVER RESOURCES COMMENCES EXPLORATION ON CARMI PROPERTY, GRANT OF STOCK OPTIONS

Hi Ho Silver Resources Inc. has commenced exploration on its Carmi molybdenum property, which is located in south-central British Columbia approximately 45 kilometres southeast of Kelowna and which covers an area of about 2,873 hectares (7,184 acres). The company has an option to acquire up to a 70-per-cent interest in the property in consideration of incurring exploration expenditures of not less that $5-million, issuing 1.5 million shares to St. Elias Mines Ltd. and making cash payments to St. Elias totalling $75,000 over two years.

The following information on the property has been taken from the 43-101 technical report on the property dated August, 2005 (revised June, 2006), prepared by the company's independent geologists Michael Sanguinetti and Paul Reynolds. Mr. Sanguinetti, PEng, and Mr. Reynolds, PGeo, are qualified persons as defined under NI 43-101. A copy of this report is available on SEDAR.

Approximately 21,533 metres of drilling has been carried out on the property, consisting of 140 percussion holes and 48 diamond drill holes all by previous operators. The majority of the drilling was carried out in areas of known mineralization, specifically the E and the Lake zones. To date, in excess of $1-million has been expended on exploration and development of the property. This work resulted in the definition and publication of a small resource, not compliant with National Instrument 43-101, of an open pittable drill-indicated molybdenum resource calculated for each body. The E zone was estimated to contain 17 million tonnes (18.7 million tons) grading 0.063 per cent molybdenum (0.105 per cent molybdenum disulphide (MoS2)) and the Lake zone, about 750 metres west of the E zone, was estimated to contain 3.7 million tonnes (4.1 million tons) grading 0.066 per cent molybdenum (0.110 per cent MoS2). A higher-grade body of molybdenite mineralization was intersected in drill intercepts of molybdenite mineralized breccias occurring as sheets or panels beneath the Lake zone. This potential underground mining target was estimated to contain 4.5 million tonnes (five million tons) grading approximately 0.2 per cent molybdenum (0.33 per cent MoS2).

The reader is cautioned that these are historical estimates and refer to categories other than the ones required by present-day Canadian securities legislation. Since these estimates have not been prepared in compliance with the CIM definitions required by National Instrument 43-101, they should not be relied upon as a reserve classification. Based on these CIM definitions, this material would be categorized as an inferred mineral resource. Note that the potential quantity and grade is conceptual in nature, that there has been insufficient exploration to define a mineral resource and that it is uncertain if further exploration will result in the target being delineated as a mineral resource. The disclosed potential quantity and grade has been determined on the basis of a 1987 report by G.M. Leary, and information contained in the B.C. Ministry of Energy, Mines and Petroleum Resources Minfile database. These data have not been verified by either the company or by Mr. Sanguinetti and Mr. Reynolds.

The 43-101 report recommends a two-phase, success-contingent exploration program consisting of orthophoto generation, data compilation, grid preparation, 3-D induced polarization surveys, and diamond drilling, along with access road and trail rehabilitation, and geological mapping and prospecting. The prime objective is to confirm and expand the breccia-hosted molybdenum mineralization in the existing defined zones, with emphasis on the deeper high-grade material at the Lake zone. The total estimated costs for the phase I and phase II programs is $1.02-million.

Hi Ho Silver has commenced the initial portion of the phase I program, which consists of creating a digitized topographic base map (orthophoto) and the compiling and digitizing of old data onto a standardized scale and base. Fieldwork, consisting of approximately 40 line kilometres of surveyed and cut control grid, 30 line kilometres of 3-D induced polarization (IP) survey and geological mapping, is scheduled to commence on Sept. 15, 2006. If initial results are successful, the company intends to commence drilling on the property.

Hi Ho Silver notes that industry support for molybdenum is strong, as indicated by Blue Pearl Mining Ltd.'s recent announcement that it has entered into a commitment letter with UBS Investment Bank with regard to a $450-million (U.S.) long-term loan facility for the acquisition of Thompson Creek Metals Company, a privately owned, integrated North American molybdenum producer. Molybdenum currently trades in the range of $25.00 (U.S.) per pound.

Grant of stock options

The company has also granted incentive stock options on a total of 1.05 million shares of the company's capital stock, exercisable up to two years at an exercise price of 70 cents per share, to certain of its directors, employees and consultants.