Silver
Standard Resources Inc.: Snowfield Preliminary Assessment Results
VANCOUVER, BRITISH
COLUMBIA, Jun 1, 2010 (Marketwire via COMTEX News
Network) -- Silver Standard Resources Inc. (TSX:SSO)(NASDAQ:SSRI) is pleased
to report the positive results from a National Instrument 43-101 compliant
Preliminary Assessment on its wholly-owned Snowfield Project located in
northern British Columbia, Canada. The project includes development of an
open pit mine, a processing plant, infrastructure, waste rock storage and
tailing impoundment areas to recover the mineralization identified to date. The
Preliminary Assessment was prepared by Wardrop
Engineering Inc., a Tetra Tech Company ("Wardrop").
Study Highlights
Based on the
Preliminary Assessment, the Snowfield Project will be operated as an open pit
mine with an average life-of-mine waste to mineral material stripping ratio
of 0.54:1 and a 120,000 tonnes per day mill feed rate. Snowfield's mine life
is estimated at approximately 23 years. An annual average of 607,000 ounces
of gold (contained in concentrate and dore), 57.8
million pounds of copper (contained in concentrate), 1.5 million ounces of
silver (contained in concentrate and dore) and 4.5
million pounds of molybdenum (contained in concentrate) will be produced from
the mill.
Capital expenditures,
including contingencies, are estimated to be US$3.4 billion. The Snowfield
Project has an estimated pre-tax net present value of US$877 million (5%
discount rate) and an internal rate of return of 8.1% using base case metals
prices of US$878/ounce gold, US$14.50/ounce silver, US$17/pound molybdenum
and US$2.95/pound copper. The Preliminary Assessment is preliminary in nature
and includes inferred mineral resources that are considered too speculative
geologically to have the economic considerations applied that would enable
them to be categorized as mineral reserves. There is no certainty that the
Preliminary Assessment will be realized.
Preliminary results
from an ongoing metallurgical program indicate the potential for significant
rhenium recoveries at Snowfield. The potential impact of rhenium on the
project's economics, as well as the inclusion of the higher-grade gold and
silver resources of the company's adjacent Brucejack
Project (summarized in Table 6), will be examined in an updated Preliminary
Assessment which is already underway.
Production &
Processing
The estimated mining
inventory is comprised of 966 million tonnes with an average mill feed grade
of 0.64 g/t gold, 1.67 g/t silver, 0.105% copper and 0.009% molybdenum and
which contains 20.0 million ounces of gold, 51.9 million ounces of silver,
2.2 billion pounds of copper and 196.6 million pounds of molybdenum based on
the Snowfield mineral resource estimate dated December 1, 2009 and summarized
in Table 5.
The processing plant
will produce a copper-gold-silver concentrate, a molybdenum concentrate and a
gold-silver dore. The following table summarizes
the associated production and processing parameters:
Table 1: Projected Production and Processing Summary
Mine Type: Open pit
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Total Mine Production: 966 million tonnes
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Processing Rate: 120,000 tonnes per day
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Mine Life (LOM): 23 years
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Strip Ratio: 0.54:1 waste to mineral material
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Copper Gold-Silver Molybdenum
Production Parameters Concentrate Dore Concentrate
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Average Product Grade:
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Gold 110 g/t 32.3% -
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Copper 22% - -
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Silver 303 g/t 67.7% -
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Molybdenum - - 50%
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Average Metal Recoveries:
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Gold (%) 44.6 22.3 -
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Copper (%) 56.9 - -
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Silver (%) 47.6 18.0 -
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Molybdenum (%) - - 50%
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Average Annual Production(1):
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Gold (000 oz's) 405 202 -
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Copper (tonnes) 26,237 - -
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Silver (000 oz's) 1,121 424 -
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Molybdenum (tonnes) - - 2,020
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(1) Refers to the average contained-in-concentrate production for the
Copper Concentrate and Molybdenum Concentrate and contained ounces for
the Gold-Silver Dore.
Capital and Operating
Costs
The total capital cost
for the Snowfield project is estimated at US$3.4 billion and the operating
cost is estimated at US$8.52/tonne milled. The following tables summarize the
break-down of capital costs and operating costs:
Table 2: Capital Costs Summary Table 3. Operating Costs Summary
Capital Costs (US$ millions) Operating Costs (US$/tonne milled)
----------------------------------- -------------------------------------
Direct Costs $2,146 Mining $ 2.28
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Indirect Costs $ 661 Processing $ 5.43
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Owner's Costs $ 98 General & Administrative $ 0.62
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Contingencies $ 474 Plant Services $ 0.19
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Total Capital Costs $3,378 Total Operating Costs $ 8.52
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Economic Analysis
The base case economic
analysis projects that the Snowfield Project would have a net present value
of US$877 million (5% discount rate) and an internal rate of return of 8.1%. A
second case was presented using recent spot metals prices. The pre-tax
economic results for both cases are presented in Table 4:
Table 4: Summary of Snowfield Pre-Tax Economic Results
Base Case Spot Prices
Economic Returns Scenario(1) at April 8, 2010
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Internal Rate of Return 8.1% 16.3%
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Net Cash Flow $3.2 billion $7.8 billion
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Net Present Value (5.0% discount rate) $877 million $3.6 billion
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Payback 7.4 years 4.5 years
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Exchange Rate (US$: C$) $ 0.92 $ 0.92
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Gold Price ($/ounce) $ 878 $ 1,150
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Silver Price ($/ounce) $ 14.50 $ 18.10
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Molybdenum Price ($/pound) $ 17.00 $ 19.54
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Copper Price ($/pound) $ 2.95 $ 3.50
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(1) Wardrop-adopted consensus forecast metal prices from the Energy Metals
Consensus Forecast (EMCF). All prices are in U.S. dollars.
Project Status
An update to the
Preliminary Assessment for the Snowfield Project is underway to incorporate
the contribution of the property's rhenium mineralization and the gold and
silver mineralization from the adjacent Brucejack
property. Completion of the update is anticipated in the fourth quarter of
2010 and a pre-feasibility study for the Project is planned to follow. To
this end, a 42,000-meter drill program is underway, primarily to focus on
expanding the current Snowfield - Brucejack mineral
resource. Other field activities in the summer of 2010 will include
collection of geotechnical and large diameter drilling, as well as other
field data, to support the preparation of the pre-feasibility study.
The current mineral
resources for the Snowfield Project and Brucejack
Project are summarized in the tables below.
Table 5: Snowfield Zone Resource Summary - December 2009(1, 2, 4)
(Based on a cut-off grade of 0.35 grams of gold-equivalent/tonne)
Contained
-------------------
Gold Silver
Tonnes Gold Silver Copper Moly(3) (oz in (oz in
Category (millions) (g/t) (g/t) (%) (ppm) millions) millions)
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Measured 136.9 0.94 1.7 0.11 99 4.14 7.7
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Indicated 724.8 0.67 1.9 0.12 91 15.63 43.2
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M+I 861.7 0.71 1.8 0.12 92 19.77 50.9
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Inferred 948.9 0.33 1.4 0.07 81 10.05 43.7
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(1) See Technical Report and Updated Resource Estimate on the Snowfield
Property dated December 1, 2009 and filed on SEDARwww.sedar.com January
14, 2010.
(2) Prepared by Eugene Puritch, P.Eng., F.H. Brown, M.Sc. (Eng.), CPG
PrSciNat, and Tracy Armstrong, P.Geo., of P&E Mining Consultants Inc.
("P&E") of Brampton, Ontario, independent qualified persons, as defined by National Instrument 43-101.
(3) "Moly" refers to molybdenum.
(4) Mineral resources that are not mineral reserves do not have
demonstrated economic viability. The estimate of mineral reserves may
be materially affected by environmental, permitting, legal, title,
taxation, socio-political, marketing or other relevant issues.
Table 6: Brucejack Area Resource Summary - December 2009(1, 2, 3)
(Based on a cut-off grade of 0.35 grams of gold-equivalent/tonne)
Contained
--------------------------
Gold
Tonnes Gold Silver (oz in Silver
Category (millions) (g/t) (g/t) millions) (oz in millions)
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Measured 9.9 2.06 75.0 0.66 23.8
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Indicated 110.7 0.95 11.7 3.38 41.6
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M+I 120.5 1.04 16.9 4.04 65.4
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Inferred 198.0 0.76 11.2 4.87 71.5
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(1) See Technical Report and Resource Estimates on the West, Bridge, Galena
Hill, Shore, SG & Gossan Hill Gold and Silver Zones of the Brucejack
Property dated December 1, 2009 and filed on SEDAR www.sedar.com
January 14, 2010.
(2) Prepared by Dr. Wayne D. Ewert, P.Geo., Tracy Armstrong, P.Geo., F.H.
Brown, M.Sc. (Eng.), CPG PrSciNat, and Eugene Puritch, P.Eng., of P&E
Mining Consultants Inc. ("P&E") of Brampton, Ontario, independent qualified persons, as defined by National Instrument 43-101.
(3) See note 4 to Table 5 above.
Independent Qualified
Persons
The following
Qualified Persons (as defined by National Instrument 43-101) are independent
of Silver Standard and responsible for the Snowfield Project Preliminary
Assessment:
Qualified Person Scope of Responsibility
Grant Bosworth, P.Eng. Overall report preparation, capital cost
Wardrop Engineering Inc. estimate
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John Huang, P.Eng. Metallurgical testing review, mineral
Wardrop Engineering Inc. processing, process operating costs and
infrastructure with exception to power,
tunneling and roads
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Tracy Armstrong, P.Geo. Report sections preparation for the Snowfield
P&E Mining Consultants Inc. NI 43-101 Technical Report
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Fred Brown, CPG Pr.Sci.Nat. Mineral resource modelling and analysis
P&E Mining Consultants Inc.
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Nory Narciso, P.Eng. Mine design, production scheduling, mine
Wardrop Engineering Inc. capital and operating costs and financial
analysis
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Iouri Iakovlev, P.Eng. Tunnel design and associated capital costs
Wardrop Engineering Inc.
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Mike Boyle, P.Eng. Roads design, access and site roads/earthworks
SJA Canada Ltd.
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Malcolm Cameron, P.Eng. Power supply design and associated costs
Wardrop Engineering Inc.
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Lori-Ann Wilchek, P.Eng. Tailing impoundment, water management plan,
BGC Engineering Inc. overall water balance, and conceptual closure
planning
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Warren Newcomen, M.Sc. Waste rock, open pit slopes design and
BGC Engineering Inc. conceptual closure planning
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Pierre Pelletier, P.Eng. Environmental concerns and permitting, capital
Rescan Environmental and operating costs estimates as they relate to
Services Ltd. environmental component of the study
Silver Standard
Resources Inc. is a silver mining company that intends to grow through
exploration and the development of its project pipeline.
Forward Looking
Statements: Certain statements in this news release, including statements
relating to the estimates to complete preliminary assessments and
pre-feasibility studies relating to the Snowfield Project, mineral resource
estimates and capital expenditures, production and economic return estimates,
are forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and forward-looking information within the
meaning of Canadian securities laws (collectively, "forward-looking
statements"). Forward-looking statements are statements that are not
historical facts and that are subject to a variety of risks and uncertainties
which could cause actual events or results to differ materially from those
reflected in the forward-looking statements. Such risks and uncertainties
include, but are not limited to, the Company's ability to raise sufficient
capital to fund development; changes in economic conditions or financial
markets; uncertainty of production and cost estimates for the Pirquitas Mine; the Company's history of losses and
expectation of future losses; changes in prices for the Company's mineral
products or increases in input costs; litigation, legislative, environmental
and other judicial, regulatory, political and competitive developments in
Argentina, Australia, Canada, Chile, Mexico, Peru, the United States and
other jurisdictions in which the Company may carry on business; technological
and operational difficulties or inability to obtain permits encountered in
connection with exploration and development activities; labour relations
matters; and changing foreign exchange rates, all of which are described more
fully in the Company's most recent Form 20-F and other filings with the
Securities and Exchange Commission and Canadian regulatory authorities. The
Company does not intend, and does not assume any obligation, to update any
forward-looking statements, other than as required by applicable law.
Cautionary note to
U.S. investors: The terms "measured mineral resource",
"indicated mineral resource", and "inferred mineral
resource" used in this news release are Canadian geological and mining
terms as defined in accordance with National Instrument 43-101, Standards of
Disclosure for Mineral Projects ("NI 43-101") under the guidelines
set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the
"CIM") Standards on Mineral Resources and Mineral Reserves. We
advise U.S. investors that while such terms are recognized and permitted
under Canadian regulations, the SEC does not recognize them. U.S. investors
are cautioned not to assume that any part or all of the mineral deposits in
the measured and indicated categories will ever be converted into reserves. "Inferred
mineral resources" in particular have a great amount of uncertainty as
to their economic feasibility. It cannot be assumed that all or any part of
an inferred mineral resource will ever be upgraded to a higher category. Under
Canadian rules estimates of inferred mineral resources may not generally form
the basis of feasibility or other economic studies. U.S. investors are
cautioned not to assume that any part or all of an inferred mineral resource
exists, or is economically or legally mineable. Disclosure of contained metal
expressed in ounces is in compliance with NI 43-101, but does not meet the
requirements of Industry Guide 7 of the SEC, which will only accept the disclosure
of tonnage and grade estimates for non-reserve mineralization. (Source:
Silver Standard Resources Inc.)
SOURCE: Silver
Standard Resources Inc.
Silver Standard Resources Inc.
Paul LaFontaine
Director, Investor Relations
(604) 484-8212 or N.A. Toll Free: 1-888-338-0046
(604) 689-3847 (FAX)
invest@silverstandard.com
www.silverstandard.com