Test Mining Metal Production to Offset the Cost of Exploration
The Company has a joint venture with the New Jersey Mining Company ("New Jersey"; the "New Jersey Agreement") to secure near-term milling capacity for the Crescent (see press releases dated October 7, 2010 and June 9, 2011). Mill expansion, including equipment installation and fabrication of structures and conveyors is nearing completion. Mine Fabrication and Machine, a business unit of the company's wholly owned subsidiary, United Mine Services, Inc., is performing much of the mill construction. Commissioning is expected to start at the end of March 2011. The joint venture agreement gives the Company an exclusive right to 7,000 tonnes per month of milling capacity, with first rights on additional unused capacity.
The mill is located less than four miles from the Crescent Mine.
The mill will initially process ore from test drifting on the South Vein currently stockpiled at the New Jersey mill. Concentrates produced by the milling of the underground drifting-produced mineralization will be sold to Formation Metals U.S. under an agreement signed in December 2011 (refer to news release dated December 13, 2011). Formation's refinery is less than three miles from the mill, virtually eliminating hauling costs.
The Company expects that the ore from underground test drifting and stoping will provide cash flow to the Company which will offset the cost of exploration development. Projected cash flow will cover the cost of expanding the Crescent deposit and avoid the need for further equity offerings during the period of the Plan.
An Integrated Company
USC CEO Graham Clark states: "The Board of Directors of the Company is excited and extremely optimistic about our plans going forward to explore, and test mine on a modest scale, the materials generated from drifts and stopes within the South Vein area of the Crescent Mine, while at the same time exploring farther afield for the on-strike and down-dip extensions to this potentially extensive silver- bearing system. We are grateful to have secured initial funding from Hale to establish our Plan which, for the next four years, will see aggressive exploration combined with cash flow from mining to finance the exploration and broader understanding of the system. We believe that the cash flow generated from mining will offset the need to go to the financial markets and undertake a public offering during this time, preserving and enhancing value for the shareholders and providing us with first-hand experience mining the deposit.
"USC management is looking forward to our Plan of combined exploration and silver production to be the beginning of the next, and most important period to date, in the evolution of the Crescent deposit".
Lawrence Dick. Ph.D., P. Geo., has approved and is responsible for technical information provided in this news release.
ABOUT UNITED SILVER CORP.
USC is a vertically integrated mining company with operations in Idaho, USA. It has earned, through development and operations, an 80% interest in the Crescent Silver Mine project in Idaho's prolific Silver Belt - directly between two of the world's historically largest silver producing properties, the Sunshine and Bunker Hill mines. USC also offers a full suite of mining services including contract mining and mine machine repair and fabrication services to silver miners in the district. USC's common shares trade on the Toronto Stock Exchange under the symbol "USC". For more information about USC, please visit: