Americas Silver U.S. Silver Reports Second Quarter 2009 Results by 24hgold

Re: News Releases - Tuesday, August 25, 2009
Title: U.S. Silver Reports Second Quarter 2009 Results

August 25, 2009 -- Toronto, Ontario -- U.S. Silver Corporation (USA: TSX-V) ("US Silver" or "the Company") is pleased to announce Q2 2009 financial results demonstrating continued progress in the Company's turnaround strategy.

Highlights:

Production of 583,453 ounces of silver in Q209, 40% higher than Q208 (416,972 ounces).
Production of 1,833,638 pounds of lead in Q209, 77% higher than Q208 (1,037,045 pounds).
Production of 250,451 pounds of copper in Q209, 18% higher than Q208 (212,179 pounds).
Cash cost per silver ounce produced of $11.34 in Q209, 19% lower than Q208 ($14.04).
Cash used in operating activities of $1.3 million in Q209 ($1.3 million used in Q208).
Net loss of $0.5 million ($0.00 per share) in Q209 compared to net loss of $0.9 million in 2Q08 ($0.00 per share).
Comprehensive loss of $1.5 million in Q209 compared to a Q208 comprehensive income of $1.6 million.
In July 2009, the Company raised gross proceeds of CA$4,600,115 via the issuance of 35,385,500 units at a price of CA$0.13 per unit, with each unit comprising one common share and one-half of a common share purchase warrant.

Company CEO, Tom Parker, stated: "We are pleased with the improved results in the first half of 2009 compared to the first half of 2008. We worked the entire first half of the year with no lost time injuries. Our Q2 production results were slightly less favorable then Q1, primarily due to lower head grades in May and early June, yet we averaged more than 200,000 ounces of silver per month during the first half of this year. In July we resumed exploration drilling with one drill underground and resumed the rehabilitation of the Galena shaft. We also continued development work underground necessary to create additional production stopes in the future."

H109 Compared to H108

The Company's net income of $0.9 million (basic net income per common share of $0.00) for the 6 months ended June 30, 2009 was $1.1 million higher than the net loss of $0.2 million (basic net loss per common share of $0.00) for the corresponding period in 2008. The $1.1 million increase in net income was impacted by higher mining costs resulting from significantly increased tonnage ($3.6 million), and lower interest income (0.4 million); which were more than offset by higher revenue ($4.0 million), lower exploration costs ($0.8 million) and higher investment income ($0.5 million, primarily from realized by-product hedging gains and one-time gains on investments).

Revenue increased $4.0 million (23%) from $17.4 million in H108 to $21.4 million in H109 due primarily to an increase in metal sales ($3.2 million) driven by selling more ounces in H109 than H108 even though metal prices were lower, and net realized gains on derivatives ($1.4 million), partly offset by lower by-product proceeds ($0.7 million).
Cost of Mining increased $3.6 million (22%) from $16.1 million in H108 to $19.7 million in H109 due to the mining of 37.7% more tons at lower costs per ton mined. Lower costs per ton resulted from the 2009 Mine Plan but lower head grades required more tons of production.
Exploration decreased $0.8 million from $1.0 million in H108 to $0.2 million in H109 due to the Company's efforts to conserve cash in early 2009 by deferring major exploration activities to the last half of the year.
Foreign Exchange Translation increased $0.1 million from a gain of $0.7 million in H108 to a gain of $0.8 million in H109 due to fluctuations between the Canadian and US dollar. However, the Foreign Exchange translation is related to USD advances to the Company's operating subsidiary. It has been determined that these advances are no longer considered short term in nature. As such, any future translation gains or losses related to the advances are, from this period onwards, included in Other Comprehensive Income.
Interest Income decreased $0.4 million from $0.4 million in H108 to $0.0 million in H109 due to the decrease in cash and cash equivalents between H108 and H109.
Investment Income increased $0.5 million from $0.0 in H108 to $0.5 in H209 due to the realized gains on sales of investments which occurred in H109.

	H109	H108
Milled � total tons	108,128	78,515
Milled � tons per day	825	613
Silver produced � ounces	1,218,244	708,175
Lead produced � pounds	2,891,285	1,859,679
Copper produced � pounds	551,571	390,447
Cash cost per silver ounce produced *	$10.95	$14.29
Full cost per silver ounce produced	$13.08	$15.97
Capitalized mine development	$2,902,955	$8,189,782
Purchases of fixed assets	$853,854	$2,057,085
Exploration	$159,503	$995,003

Revenue increased $0.2 million from $10.1 million in Q208 to $10.3 million in Q209 due primarily to an increase in silver ounces sold (even though metal prices were lower in Q209 than in Q208), partly offset by lower lead hedge income.
Cost of Mining remained unchanged from Q208 to Q209 at $10.0 million with 29.8% more tons mined and milled without increasing the cost structure.
General and Administrative decreased $0.2 million (26.8%) from $0.9 million in Q208 to $0.7 million in Q209 primarily due to the implementation of cost control measures in early 2009.
Exploration Costs decreased by $0.4 million (73.5%) from $0.5 million in Q208 to $0.1 million in Q209 since the major 2009 exploration initiatives will be started in the second half of 2009.

Q209 Compared to Q208

	Q209	Q208
Milled � total tons	55,535	42,791
Milled � tons per day	858	668
Silver produced � ounces	583,453	416,972
Lead produced � pounds	1,833,638	1,037,045
Copper produced � pounds	250,451	212,179
Cash cost per silver ounce produced*	$11.34	$14.04
Full cost per silver ounce produced	$13.48	$15.80
Capitalized mine development	$1,277,364	$3,926,786
Purchases of fixed assets	$730,634	$552,546
Exploration	$139,378	$526,767

*The Company reports the cash cost per ounce of silver produced in accordance with guidance provided by the Gold Institute utilizing the by-product method. This method is widely reported in the silver mining industry as a benchmark for performance measurement. However, the method does not include depletion, depreciation, exploration or corporate administrative costs and is, therefore, not directly reconcilable to costs as reported under generally accepted accounting principles in Canada or the U.S.A.

The increase in tons milled is the result of several key factors including: additional production headings available to mine, additional development headings in mineralized material contributing to larger ore feed but with some dilution of head grades, increased mining experience among the newest miners in the workforce and utilization of contractors in key production areas. Development material added to the ore mill feed resulted in a lower than forecast head grade but contributed to the higher number of ounces produced. Higher grade lead development material and additional resources dedicated to lead ore development resulted in more lead tons milled and more lead produced. Total costs were higher as a result of the additional tons mined, but higher equivalent ounces produced effectively lowered the cost per ounce produced. Capitalized development and exploration expenditures were lower as a result of cash conservation initiatives introduced in late Q408 and continuing through Q209. The increase in fixed asset purchases was mainly due to the long delivery time for purchases in Q208 whereas equipment requested in 2Q09 was more immediately available.

Q209 Compared to Q109

The Company's net loss of $0.5 million (basic net loss per common share of $0.00) for Q209 was $1.9 million worse than the Company's net income of $1.4 for Q109 (basic net income per common share of $0.01). The approximately $1.8 million decline was primarily due to lower revenues ($0.8 million), lower investment income ($0.4 million), higher cost of mining ($0.2 million) and higher exploration costs ($0.1 million); partly offset by a higher recovery for taxes ($0.2 million).

The Q209 comprehensive loss of $1.5 million was $2.3 million worse than the Q109 comprehensive income of $0.8 million. The change was primarily due to a lower net income ($1.9 million), a higher unrealized loss on available-for-sale financial assets ($0.8 million) and higher unrealized loss on derivatives designated as cash flow hedges ($0.7 million); partly offset by higher unrealized foreign currency gain on self-sustaining operations ($1.0 million).

Revenue decreased $0.8 million from $11.1 million in Q109 to $10.3 million in Q209 primarily due to a selling fewer ounces in Q209 than Q109 due to concentrate shipping delays.
Cost of Mining increased $0.2 million from $9.8 million in Q109 to $10.0 million in Q209 due to mining 6% more tons in Q209 than Q109 at a lower average cost per ton mined. Head grades did not improve, as had been expected.
General and Administrative costs decreased $0.2 million from $0.9 million in Q109 to $0.7 million in Q209 due to on-going efforts to manage controllable costs.
Foreign Exchange Translation worsened $0.8 million from a gain of $0.8 million in Q109 to $0.0 million in Q209 due to fluctuations in the exchange rates between the Canadian and US dollar. However, the Foreign Exchange translation is related to USD advances to the Company's operating subsidiary. It has been determined that these advances are no longer considered short term in nature. As such, any future translation gains or losses related to the advance are from this period onwards included in Other Comprehensive Income.

ABOUT U.S. SILVER CORPORATION

U.S. Silver, through its wholly-owned subsidiaries, owns and operates the Galena, Coeur, Caladay and Dayrock silver-lead-copper mines in Shoshone County, Idaho, with the Galena mine being the second most prolific silver mine in US 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 the production from existing operations as well as exploring and developing its extensive Silver Valley holdings in the Coeur D'Alene Mining District.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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.

FOR FURTHER INFORMATION PLEASE CONTACT:

Tom Parker
President and CEO
(208) 752-0400

Copyright � 2009 US SILVER CORPORATION (USA) All rights reserved. For more information visit our website at http://www.us-silver.com/ or send email to hfairhurst@us-silver.com ..
Message sent on Wed Aug 26, 2009 at 8:29:32 AM Pacific Time

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