UNITED MINING GROUP ANNOUNCES US$9 MILLION DEVELOPMENT
PROGRAM TO ACCELERATE START UP OF THE CRESCENT SILVER MINE
United Mining Group, Inc.
("UMG" or the "Company"),
(TSX:UMG)(OTCQX:UMGZF)(FRANKFURT:UM8) is pleased to announce a US$9 million pre-production
mine development program and operations update on its intermediate-advanced
stage Crescent Silver Mine project, located in Silver Valley Idaho, in the
Coeur d'Alene Mining District.
The Company has achieved
significant progress since May 2010, when it acquired through an earn-in
agreement an 80 percent ownership interest in the Crescent Silver Mine, by
spending $9 million in exploration and development within a three-year period.
During 2010, the Company successfully repaired and rehabilitated approximately
6,000 feet of the Hooper Tunnel, the main entrance to the mine and completed a
450 foot exploration drift extension, the first phase of a program to extend
the tunnel an additional 1,100 feet west, to allow access for underground
drilling. Additionally, construction of the Countess Portal in the upper
elevations of the property, above the Hooper Tunnel, was completed along with
construction of 1,337 feet of the Countess Decline ramp, the first phase of a
program to drive the ramp 2,200 feet into the property to provide access to the
Alhambra and South veins. As of December 31, 2010, the Company spent
approximately $3.7 million toward its $9 million earn-in commitment, exceeding
its requirement to spend $2 million in the first year. The Crescent Silver Mine
Earn-in Agreement includes an acceleration option whereby the Company will earn
a 50% ownership interest in the Crescent Silver Mine property, once it has
spent $5 million in exploration and development.
In January 2011, the Company
continued construction of the final 650 feet of the planned 1,100 foot
extension of the Hooper Tunnel which is scheduled for completion in the second
quarter of 2011. The 1,100 foot extension will allow for further underground
drilling. In mid March development mining crews completed the Countess Decline
Ramp to 2,200 feet. The Countess Decline Ramp now provides production access to
the Alhambra and South veins and will allow the Company to pursue further
project exploration and growth potential. Initial ore drifting on the South
Vein has commenced along with development of the footwall and attack ramps.
Results of the 2011 underground
and surface exploration and development programs are expected to contribute to
an update of the previously established NI 43-101 compliant indicated resource
estimate of 6.1 million ounces of silver (324,000 tons grading 18.7 opt
silver), and inferred resources of 4.1 million ounces silver (211,000 tons
grading 19.5 opt silver) (SRK Consulting, NI 43-101 March 1, 2010). The primary
focus of the underground and surface drilling and sampling program is the
previously un-mined, high-grade South Vein.
As a condition of reopening the
Crescent Silver Mine, the Company is required to build a secondary escape way
from the mine and has studied several options that would allow the Company to
commence production in the first half of 2012. The initial option, an internal
shaft raise, which was scheduled to commence construction in June 2011, for
completion in May 2012, at an estimated cost of $7 million, has been replaced
with a second option, the Wilkie Incline, a secondary
ramp at 3,600 foot elevation, scheduled to commence construction in May 2011,
at an estimated cost of $5.9 million, with completion planned in December 2011.
Independent from the Hooper Tunnel, the mine's main entrance, the Wilkie Incline is designed to allow all underground
production and development to proceed quickly and easily on both the Alhambra
and South veins. To view the Company's three dimensional models depicting the
proposed development program for the Crescent Silver Mine, please click on http://www.unitedmininggroup.com/maps.php or go to the Company's website at
www.unitedmininggroup.com.
"As the Company moves toward
its goal of bringing the Crescent Silver Mine back into production it is also
building its engineering, geological, mining and safety support teams. Our
aggressive 2011 exploration program along with the construction of the Wilkie Incline will provide significant operational
advantages both in terms of costs and scheduling. By shortening our
pre-production mine development program by 3-5 months, the Wilkie
Incline is expected to allow the Company to commence initial production at the
Crescent Silver Mine in the first quarter of 2012, at least one quarter earlier
than originally anticipated", said Mr. Charles Pitcher, Chief Executive
Officer.
ABOUT UNITED
MINING GROUP
United Mining Group is a vertically
integrated mining company with operations in Idaho, USA. The Company is
currently earning, through development and operations, an 80% interest in the
Crescent Silver Mine project in Idaho's prolific Silver Belt - directly between
two of the world's historically largest silver producing properties, the
Sunshine and Bunker Hill mines. The Company also offers a full suite of mining
services including contract mining and mine machine repair and fabrication
services to silver miners in the district. UMG is committed to building a
senior silver-producing mining company based on aggressive exploration and
development of the highly-prospective current land position at the Crescent
Silver Mine project and through the acquisition of additional precious metals interests.
The Company trades on the Toronto Stock Exchange under the symbol
"UMG". For more information about the Company, please visit: www.unitedmininggroup.com.
In compliance with NI 43 101,
David Deering, P.Eng., is the Qualified Person responsible for the accuracy of
this news release.
ON BEHALF OF
UNITED MINING GROUP, INC.
"Charles
Pitcher"
Chief Executive Officer
FOR MORE INFORMATION, PLEASE CONTACT:
Greg Stewart
Chief Operating Officer
Tel: 208.682.9018
gstewart@unitedmininggroup.com
FORWARD LOOKING STATEMENTS: This
press release contains forward-looking statements, which address future events
and conditions, which are subject to various risks and uncertainties. The
Company's actual results and financial position could differ materially from
those anticipated in such forward-looking statements as a result of numerous
factors, some of which may be beyond the Company's control. These factors
include: results of exploration activities and development of mineral
properties, estimation of mineral reserves and resources, fluctuations in the
marketplace for the sale of minerals, the inability to implement corporate
strategies, the inability to obtain financing, currency fluctuations, general
market and industry conditions and other risks disclosed in the Company's
filings with Canadian Securities Regulators.
Forward-looking statements are
based on the expectations and opinions of the Company's management on the date
the statements are made. The assumptions used in the preparation of such
statements, although considered reasonable at the time of preparation, may
prove to be imprecise and, as such, undue reliance should not be placed on
forward-looking statements. The Company expressly disclaims any intention or
obligation to update or revise any forward-looking statements whether as a
result of new information, future events or otherwise.
The TSX Exchange has not reviewed
and does not accept responsibility for the adequacy or accuracy of the content
of this news release.