U.S. Silver Reports August Silver Production Up 38% Over 2nd Quarter 2008
TORONTO, ONTARIO–(Marketwire – Sept. 16, 2008) – U.S. Silver Corporation (TSX VENTURE:USA) (“U.S. Silver” or the “Company”) is pleased to announce that August silver production was 191,400 ounces, which is 38% higher than the average monthly production in the 2nd quarter of 2008 and 105 % higher than the average monthly production in 2007. This is an annualized rate of approximately 2.29 million ounces.
The mine averaged 812 tons per day in July, an increase of 240% compared to the 2007 average of 338 tons per day and a 198% increase as compared to 1st quarter 2008 numbers. August production of 191,400 ounces of silver is the highest monthly production since U.S. Silver acquired the Galena Mine Complex. The mine also produced an additional 21,700 ounces of silver equivalents in the form of lead and copper by-products. Management remains confident that by the end of 2008, silver production levels will increase to over 250,000 ounces of silver per month, in addition to by-product lead and copper.
In the short term, the Company expects production in September to be higher than the levels of the previous three months. Production should increase further in the 4th quarter as new production from the 5200 level silver-lead zone begins. In addition, management anticipates continued increases in tonnage and grade increases from other producing levels.
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The costs at the Galena Mine during August have fallen to $10.92 per ounce of silver. Management believes that costs will continue to decline, particularly in the fourth quarter of 2008, as the fixed costs of both mining and milling will be spread over greater silver production. Grades in both ore types will increase as ore production moves from development into regular production where dilution levels will shrink.
While the cost per ounce are calculated on a net of by-product credit basis, the copper and lead production has not yet significantly lowered costs. However, lead production is forecast to increase significantly in the final quarter of 2008 as the Coeur Mill moves from milling approximately 200 tons per day of lead- silver ore over a five-day work week, to over 400 tons per day on a seven-day work week, coupled with an improved grade. August lead- silver ores averaged 5.1 % Pb and 5.0 ounces Ag per ton. Year-end grades are forecast to reach approximately 7% Pb and over 7 ounces Ag per ton. Copper-silver grades were also up in August by approximately 22 %, with 13.5 oz silver per ton and with .43 % copper. Management believes the silver-copper grades will also continue to improve during the fourth quarter of 2008. Further cost reduction reviews are currently underway.
The Company earlier announced that it had unwound most of the forward sales contracts outstanding for 2008 that had been established to hedge forecast lead production. As of today, all remaining lead hedges have been repurchased, thereby locking in the remaining gains realized from the significant move downward in spot lead over the last 10 months. The Company’s accounting policy requires that gains of approximately $ 2,600,000 will be recognized during the third and fourth quarters of 2008, along with approximately $ 700,000 in the first half of 2009. Approximately $ 400,000 has already been recognized in the first half of 2008.
Galena Shaft Update
The repairs to the Galena shaft continued on schedule with final repair completion expected by the end of 2008. The shaft repair started at the 2400 level and is currently down to the 3000 foot elevation with nearly 600 feet of shaft repair complete. The shaft will be completely cement-lined from the 2400 level down to the 3200 level when the repairs are complete in three months.
U.S. Silver Corp. remains debt free and currently holds cash and investments of approximately $11 million.
Information of a technical nature in this press release respecting the properties has been prepared and reviewed by Mr. Daniel H. Hussey, Manager of Exploration for U.S. Silver who supervised the drilling and sampling programs, and resource estimation. Mr. Hussey is a “qualified person” within the meaning of National Instrument 43-101 of the Canadian Securities Administrators.
ABOUT U.S. SILVER CORPORATION
U.S. Silver, through its wholly owned subsidiaries, owns and operates the Galena, Coeur, and Caladay silver-lead-copper mines in Shoshone County, Idaho, with the Galena Mine being the second most prolific silver producer in U.S. history. Total silver production from U.S. Silver’s mining complex has exceeded 210 million ounces of silver production since 1953. U.S. Silver controls a land package now totaling approximately 18,000 acres in the heart of the Coeur d’Alene Mining District. U.S. Silver is focused on expanding its production from existing operations as well as exploring and developing its extensive Silver Valley holdings.
Certain information in this press release may contain forward- looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in filings by the Company with the Canadian securities regulators, which filings are available at www.sedar.com.
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