South American Silver Corp fka SAC

[sumisu]

South American Silver Corp.: Updated Malku Khota Study Doubles Production Levels and 1st 5 Year Cashflow Estimates

Press Release Source: South American Silver Corp. On Thursday March 31, 2011, 8:36 am

VANCOUVER, BRITISH COLUMBIA--(Marketwire - 03/31/11) - South American Silver Corp. (TSX:SAC - News)(PINK SHEETS:SOHAF - News) is pleased to report positive results from an updated Preliminary Economic Assessment (the "PEA" or "Assessment") including an updated resource estimate for its 100% owned Malku Khota silver-indium project. A detailed NI 43-101 technical report will be filed within 45 days on SEDAR at www.sedar.com.

Highlights

--Updated Malku Khota economic assessment study doubles mine throughput to 40,000 tonnes per day (tpd) for a 15 year mine life with excellent potential for extension through additional drilling.

--Annual silver production for the first 5 years of 13.2 million ounces at a cash cost of $2.94 per ounce net of by-product credits at "base case" metal prices putting it in the lower quartile of producer costs.

--Annual production 80 tonnes per year of indium and 15 tonnes of gallium.

--Pre-tax NPV at a 5% discount rate of $704 million and IRR of 37.7% at "base case" metal prices of $18.00/oz silver, and $500/kg indium, increasing to a NPV5% of $1.536 billion and IRR to 64.3% at "middle price case" of $25.00/oz silver, and to a NPV5% of $2.571 billion at the "recent price case" of $35/oz silver.

--Cash flows for the first 5 years increase to average $185 million per year at the base case, to $287 million per year at the middle case and to $430 million per year for the recent price case.

--Updated resource estimate expands Measured and Indicated resources 60% to 230 million ounces of silver with an additional Inferred resource of 140 million ounces of silver.

--2010 drill program successfully confirms the geologic model with over 80% of the life-of-mine silver resources classified as the Measured and Indicated category in the pit model.

--During the construction phase approximately 1,000 new jobs would be created in the region with over 400 employees likely during operations.

--Budget of $16 million approved for 2011 with Pre-Feasibility activities beginning in Q2.

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