• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

U.S. Energy Corp. Announces Sutter Gold Diamond Drill Program

Posted on: Thursday, 11 May 2006, 12:06 CDT

RIVERTON, Wyo., May 11 /PRNewswire-FirstCall/ -- U.S. Energy Corp. (USE) announced today that Sutter Gold Mining Inc. (TSX-VX: SGM) announced that it is moving forward with a combined underground and surface diamond drill program on its advanced stage gold project in the historic Mother Lode. The 18,000 foot drill program is scheduled to start in June.

The 2006 drill program will be divided between underground and surface holes. The 24 hole underground step-out and infill drill program will further define areas with significant mineralized material in six vein structures at the southern end of the Comet zone. The underground drill stations will be located at the end of the existing 2,850 foot decline. The 9 to 12 hole surface drill program is to grid test an area containing what may be another significant mineralized deposit in the K5 Vein, historically mined on Sutter's property at the South Spring Hill Mine. Historical records from this area of the K5 Vein reported that portions of the vein were mined with widths ranging from 8 to 70 feet from the mine's drifts and crosscuts.

"We are excited about the 2006 drilling program as this is a real opportunity to significantly advance the project by increasing the delineation of mineralization in two important areas, prior to initiating a bankable feasibility study," noted Hal Herron, Chief Executive Officer of Sutter Gold Mining Inc. "Further, this drilling program only affects some 10% of the 3.2 miles of Mother Lode trend that the Company controls, leaving some 90% of the property open for exploration potential ... along both strike and at depth. This month the World Gold Council predicted that the price of gold will reach $850 an ounce over the next 18 months and given that the price of gold has recently risen to $680, management continues to aggressively move this project forward."

Mr. Mark Payne, P. Geo. Calif. 7067, is the Qualified Person for the Sutter Gold Project, as defined by NI 43-101 and has reviewed this release.

About the Sutter Gold Mine

The Sutter Gold project contains a 3.2-mile segment of the Mother Lode belt from which 10 historic mines produced 2.3 million ounces of gold. The historic mines bracket a one-mile-long portion of the Mother Lode belt with no historic gold production that contains the Lincoln and Comet zones. The Lincoln and Comet zones were "blind" discoveries that did not outcrop at surface and represent the first significant new gold discoveries made along the Mother Lode belt in the last 50 years. A total of 85,085 feet of drilling has been accomplished in 190 diamond drill holes, and modern underground development consists of a 2,850-foot declined ramp with 2,400 feet of crosscuts and five raises. The project has received all of the major permits required for production. The historic gold production was documented in a detailed report completed by Mark Payne, the consulting geologist to Sutter Gold and a qualified person as defined by National Instrument 43-101. Further information is available at the Company's website at http://www.suttergoldmining.com/.

U. S. Energy Corp. owns approximately 65% of the outstanding shares in SGM.

For additional information on Sutter Gold, please visit http://www.suttergoldmining.com/. For U. S. Energy Corp., please visit: http://www.usnrg.com/ ABOUT U.S. ENERGY CORP. AND CRESTED CORP.

U.S. Energy Corp. and its majority-owned subsidiary, Crested Corp., are engaged in a joint venture to conduct various business operations as USECC. Through their subsidiaries, Sutter Gold Mining Inc., Plateau Resources Limited, Inc., U.S. Moly Corp, U.S. Uranium Ltd. and USECC, they own various interests or properties prospective for gold, uranium, vanadium and molybdenum.

This news release includes statements which may constitute "forward-looking" statements, usually containing the words "believe,""estimate,""project,""expect," or similar expressions. These statements are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, future trends in mineral prices, the availability of capital, competitive factors, and other risks.

The profitable mining and processing of uranium and vanadium will depend on many factors: Obtaining properties in proximity to the Shootaring mill in southeastern Utah to keep transportation costs economic; delineation through extensive drilling and sampling of sufficient volumes of mineralized material, with sufficient grades, to make mining and processing economic over time; continued sustained high prices for uranium oxide and vanadium; obtaining the capital required to upgrade the Shootaring mill and add a vanadium circuit, and obtaining and continued compliance with operating permits.

The profitable mining and processing of gold will depend on many factors, including receipt of final permits and keeping in compliance with permit conditions; delineation through extensive drilling and sampling of sufficient volumes of mineralized material, with sufficient grades, to make mining and processing economic over time; continued sustained high prices for gold, and obtaining the capital required to initiate and sustain mining operations, and build and operate a gold processing mill.

We have not yet obtained feasibility studies on any of our mineral properties. These studies would establish the economic viability, or not, of the different properties based on extensive drilling and sampling; the design and costs to build and operate gold and uranium/vanadium mills; the cost of capital, and other factors. Feasibility studies can take many months to complete. We have not established any reserves (economic deposits of mineralized materials) on any of our uranium/vanadium or gold properties, and future studies may indicate that some or all of the properties will not be economic to put into production. The molybdenum property has had extensive work conducted by prior owners to establish the deposits of molybdenum, mine planning and other ancillary activities. This data will have to be updated to determine the viability of starting mining and milling operations. Obtaining mining and other permits to begin mining the molybdenum property may be very difficult, and, like any mining operation, capital requirements for a molybdenum mining operations will be substantial.

By making these forward-looking statements, the Companies undertake no obligation to update these statements for revision or changes after the date of this release.

DISCLOSURE REGARDING MINERAL RESOURCES UNDER SEC AND CANADIAN REGULATIONS

USE is a joint venture partner with Uranium Power Corp. ("UPC") and a major shareholder of SGMI. The common stock of UPC and SGMI, both Canadian corporations, are traded on the TSX-V, and are subject to the reporting requirements of the TSX-V and Canadian securities regulatory authorities. Harold F. Herron, Senior Vice President and Director of USE and Crested, serves on the board of directors of SGMI and is also the Company's President and CEO and Chris Healey, Vice President Exploration of USE, serves on the board of directors of UPC.

From time to time, UPC and SGMI make public disclosures in compliance with National Instrument 43-101, "Standards of Disclosure for Mineral Properties." NI 43-101 establishes procedures and standards for determining the existence of, and the reporting of, Mineral Resources and Mineral Reserves. Mineral Resources are classified in ascending categories of geological confidence, as Inferred, Indicated, and Measured. Each definition relates to a resource that is determined to be of "such a grade or quality that it has reasonable prospects for economic extraction." Mineral Reserves are classified as Proven or Probable.

The SEC allows public disclosure of the extent and grade of mineral deposits, and, under SEC Industry Guide 7, "Description of Property by Issuers Engaged or to be Engaged in Significant Mining Operations, of Proven (Measured) Reserves and Probable (Indicated) Reserves. In contrast to NI 43-101, the SEC does not allow public disclosure of Inferred, Indicated, or Measured Resources. In addition, there are some significant differences in the standards allowed, and the procedures required to be followed by the SEC for public disclosure of the SEC's Proven (Measured) Reserves and Probable (Indicated) Reserves, as compared to NI 43-101 for Proven and Probable Mineral Reserves."

United States residents, who obtain information about those of our uranium properties, and about the gold properties, which are reported upon by UPC and SGMI to the TSX-V in accordance with NI 43-101, and about SGMI's gold properties, are cautioned that such information may be materially different from what would be permitted under SEC rules for United States companies.

U.S. Energy Corp.

CONTACT: Hal Herron of U.S. Energy Corp., +1-307-856-9271,hal@usnrg.com

Web site: http://www.usnrg.com/http://www.suttergoldmining.com/

Source: PRNewswire-FirstCall

More News in this Category