U.S. Silver & Gold announces 2012 production totals, 2013 guidance and high-grade silver copper in Caladay Zone

TORONTO, Jan. 30, 2013 /CNW/ - U.S. Silver & Gold Inc. ("U.S. Silver & Gold" or the "Company") (TSX: USA) (OTCQX: USGIF) today announced production for 2012, production guidance for 2013 and positive new findings in the Caladay Zone (previously known as the Lead Zone) of the Galena Complex.

Highlights

• Strong fourth quarter consolidated silver production totalling 661,337 ounces along with gold production of 3,832 ounces.
  
  
• Consolidated annual silver production of 2.57 million ounces, representing an increase of 6 percent over 2011 and consolidated annual gold production of 20,432 ounces.
  
  
• Discovery of a large, high grade area of silver-copper mineralization adjacent to the Caladay Zone. Drill results include 3.7 feet at 65.3 ounces per ton silver (2,239 grams per tonne), 5.5 feet at 59.7 ounces per ton silver (2,047 grams per tonne) and 2.0 feet at 66.2 ounces per ton silver (2,270 grams per tonne).
  
  
• Additional high grade silver-lead mineralization identified in the Caladay Zone since the Company's last exploration update¹ including 16.8 feet at 25.79 ounces per ton silver equivalent² (884 grams per tonne silver equivalent) and 7.5 feet at 23.90 ounces per ton silver equivalent (819 grams per tonne silver equivalent).
  
  
• Year-end cash balance of approximately $19 million. 
  
  
• Forecast 2013 silver production to grow approximately 10 - 15 percent to 2.7 - 3.0 million ounces with projected cash costs reduced approximately 10 percent to $17.00 - $19.00 per ounce.

Year-end financial statements for U.S. Silver & Gold are scheduled to be released on or about March 27, 2013.  The final calculation of operating costs has not yet been completed, but total cash costs for all of 2012 are expected to be in line with forecast. The Company expects to update its NI 43-101 compliant reserves and resources in late February following independent 3^rd party review.

"Our goals for 2013 are to increase production, reduce costs and raise the profitability of the ounces we mine," stated Darren Blasutti, President and CEO of U.S. Silver & Gold.  "With the increased silver production achieved during the fourth quarter of 2012, and expected higher productivity from our new 24/7 schedule, we are confident we can meet the goals set for 2013. We are particularly excited about the increasing potential of the Caladay Zone.  Recent drilling, along with the modelling of past results, has led to the expansion of existing silver-lead areas and the discovery of a large, high-grade silver-copper target that is close to our existing mine infrastructure.  These new areas will enable us to take advantage of our additional hoisting and milling capacity to increase production in 2014 and beyond, with modest capital outlays."

Galena Complex Production Update

Galena Mine

The Galena Complex produced 625,604 ounces of silver during the fourth quarter of 2012 and 2.25 million ounces in total for the year.  Ore grade for the quarter increased to 10.7 ounces per ton silver from 10.0 ounces per ton in the previous quarter.  Quarterly ore tonnage grew 7 percent to 60,497 tons following a planned workforce increase.  Further productivity improvements are expected as the adoption of a new 24 hour, seven-days-a-week shift schedule is completed early in 2013.

During late 2012 and early 2013, a review of historic data for the Caladay Zone, along with continued exploration, identified an area of high grade silver-copper mineralization between the 4700 and 5200 Levels.  It is a zone of silver-copper mineralization found on the hanging wall side of a broader area of silver-lead mineralization.  It occurs as a cluster of narrow stringer veins, shear fillings, and siderite veins.  This discovery is in a location that is distinct from the area previously known as the Lead Zone, but overlaps it.  See Figure 1 for illustration of the Caladay Zone. The high grade silver-lead and new silver-copper areas between the 4700 and 5200 Levels in the Caladay Zone are in close proximity to existing Galena mine infrastructure. See Figure 2 for part of the 4900 Level Plan. The Galena Complex has over 600 tons of unused hoisting and milling capacity which will allow for increased production from these areas as early as Q4, 2013. The first priority will be to pursue a low capital cost option to fully utilize existing production capacity over the next several years while the Company studies expansion options beyond the existing 1,500 tons per day milling and hoisting capacity. These studies will consider activation of the adjacent 4,900 foot Caladay shaft which is currently idle. Current drilling and planned second-quarter 2013 test mining will provide a further opportunity for geologists and engineers to better understand both the high grade silver-lead resource and the new silver-copper discovery.  A scoping study has been initiated to determine the timing and most profitable approach to integrating this zone into existing mine plans.  Preliminary findings from this study are expected to be available at mid-year.

Table 1 below outlines selected drill information from the newly discovered silver-copper mineralization.

Note for Tables 1, 2 and 3: Since these drill holes were completed from different drill stations and intersect the veins at various angles, the recovered intersections may not reflect true widths. Complete drill hole data can be found at www.us-silver.com.

Table 2 outlines selected additional silver-lead holes from the Caladay Zone.

Note: Silver equivalent calculations used $30 silver prices and $0.90 lead prices.

Coeur Mine

Initial production from redevelopment of the Coeur Mine began during the fourth quarter of 2012.  As expected, the silver-copper ore mined here has been of a similar grade to the silver ore that is mined at the Galena Mine.  Continued new development as well as rehabilitation of existing workings will contribute to overall site production and provide access for exploration in the coming year.  Activities in this section of the Galena Complex are planned to be cash flow positive in 2013 at current metal prices.  The Coeur Mine is expected to ramp-up from roughly 125,000 ounces of silver production in 2013 to approximately 500,000 ounces of silver production by 2016.

350-370 Silver Vein System

As previously announced in the Company's October 11, 2012 press release, a new silver-copper vein system called the 350-370 was identified at the Galena Complex.  Additional drilling has since traced this mineralization to within 150 feet of existing workings on the 5200 level.  This area has the potential to offer near-term production opportunities at grades and widths comparable to other silver-copper ore currently being mined.

Table 3 below outlines the latest drill intersections showing mineralization in the 350-370 area. Complete drill data can be found at www.us-silver.com.

Drumlummon Mine Production Update

During the fourth quarter of 2012, the Drumlummon mine produced 3,469 ounces of gold and 35,733 ounces of silver.  Total production for the year was 20,070 ounces of gold and 316,194 ounces of silver.  Mining was continued on the Charlie and Drumlummon Veins.

It is anticipated that in 2013, mining will be initiated on the Christmas, North Star and Frankie Veins and continue on the Charlie and Drumlummon Veins. Gold production is forecast to be 14,000 to 18,000 ounces and is dependent on resource delineation on the aforementioned mining areas.

2013 Guidance

Consolidated silver production of between 2.7 and 3.0 million ounces is expected for 2013. This represents a 10 to 15 percent increase over silver production in 2012, which can be attributed to higher planned grades at the Galena Mine, expected productivity gains from mine schedule changes, modest production at the Coeur Mine, and initial ore from test mining in the Caladay Zone to offset reduced silver production from the Drumlummon Mine compared with 2012. Cash costs are forecast to drop by approximately 10 percent to between $17.00 and $19.00 per ounce of silver.  Lower unit costs will be driven by a larger production base as well as productivity improvements expected from the new higher capacity mine schedule.  Consolidated gold production is forecast at 14,000 to 18,000 ounces.

Quality Assurance / Quality Control ("QA/QC")

U.S. Silver & Gold maintains a QA/QC Program for all assays, whether completed at the Drumlummon laboratory or at a contract laboratory including the use of standards, blanks, duplicates. All QA/QC results are evaluated using a program of QA/QC monitoring.  Both the contract laboratory and the Drumlummon laboratory maintain programs of QA/QC as well.  Assays for the Caladay Zone were prepared by a commercial laboratory located in Osburn, Idaho.

About U.S. Silver & Gold Inc.

U.S. Silver & Gold Inc. is a newly formed silver and gold mining company focused on growth from its existing asset base and the execution of targeted accretive acquisitions. U.S. Silver & Gold owns and operates the Galena Mine Complex in the heart of the Silver Valley/Coeur d'Alene Mining District, Shoshone County, Idaho and the Drumlummon Mine Complex in Lewis and Clark County, Montana. Within the Galena Mine Complex, the Galena Mine produces high-grade silver and is the second most prolific silver mine in U.S. history, delivering over 200 million ounces to date, the Coeur Mine is under re-development with first production having been achieved in late 2012 and the Caladay Zone is being evaluated for bulk mining development. The Drumlummon Mine currently produces high-grade gold and silver with historical production of 1 million ounces of gold and 12 million ounces of silver and has never been fully exploited or explored.  Visit www.us-silver.com.

Mr. Jim Atkinson, Vice President, Exploration and a Qualified Person under Canadian Securities Administrators guidelines, has approved the contents of this news release.

Some of the potential quantities and grades disclosed in this news release are conceptual in nature. At the current stage of exploration, there is insufficient drilling to determine the extent of continuity of the mineralization required to define a mineral resource for all mineralization at the Galena Mine Complex and Drumlummon Mine. It is uncertain if further exploration will result in certain exploration targets being delineated as a mineral resource.

Please see SEDAR or www.us-silver.com for the NI 43-101 compliant Technical Report and Resource Estimate on the Drumlummon Mine Project dated April 9, 2012 and the Galena Project dated March 19, 2012.

Cautionary Statement Regarding Forward Looking Information:

This news release contains "forward‐looking information" within the meaning of applicable securities laws. Forward‐looking information includes, but is not limited to, the Company's expectations intentions, plans, and beliefs with respect to, among other things, the Galena Mine Complex and the Drumlummon Mine. Often, but not always, forward‐looking information can be identified by forward‐looking words such as "anticipate", "believe", "expect", "goal", "plan", "intend", "estimate", "may", and "will" or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions, or statements about future events or performance. Forward‐looking information is based on the opinions and estimates of the Company as of the date such information is provided and is subject to known and unknown risks, uncertainties, and other factors that may cause the actual results, level of activity, performance, or achievements of the Company to be materially different from those expressed or implied by such forward looking information. This includes the ability to develop and operate the Galena and Drumlummon properties, risks associated with the mining industry such as economic factors (including future commodity prices, currency fluctuations and energy prices), failure of plant, equipment, processes and transportation services to operate as anticipated, environmental risks, government regulation, actual results of current exploration activities, possible variations in ore grade or recovery rates, permitting timelines, capital expenditures, reclamation activities, social and political developments and other risks of the mining industry. Although U.S. Silver and Gold has attempted to identify important factors that could cause actual results to differ materially from those contained in forward‐looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. Readers are cautioned not to place undue reliance on such information. By its nature, forward‐looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific those contribute to the possibility that the predictions, forecasts, and projections of various future events will not occur. The Company undertakes no obligation to update publicly or otherwise revise any forward‐looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

¹ "U.S. Silver & Gold Intersects Wide Zones of Silver Mineralization in Lead Zone at Galena Complex", November 28, 2012.
² Assumes metal prices of $30/oz silver and $0.90/lb lead.

Image with caption: "Caladay Zone (CNW Group/U.S. Silver & Gold Inc.)". Image available at: http://photos.newswire.ca/images/download/20130130_C9993_PHOTO_EN_23138.jpg

Image with caption: "4900 Level Plan (CNW Group/U.S. Silver & Gold Inc.)". Image available at: http://photos.newswire.ca/images/download/20130130_C9993_PHOTO_EN_23139.jpg

SOURCE: U.S. Silver & Gold Inc.

4900 Level Plan (CNW Group/U.S. Silver & Gold Inc.)

Darren Blasutti 
President and CEO
416-848-9503 
www.us-silver.com 

Nicole Richard 
Investor Relations - Canada 
416-848-9503

Heather Bailey 
Investor Relations - United States
208-556-1535 ext. 1002