Silver
Standard Increases Pirquitas Reserves by 27% and Updates Capex
VANCOUVER, BRITISH
COLUMBIA, Nov 26, 2007 (Marketwire via COMTEX News Network) -- Silver
Standard Resources Inc. (TSX:SSO)(NASDAQ:SSRI) reports that proven and
probable silver reserves at Pirquitas have increased by 27 percent to 136
million ounces from 107.1 million ounces of silver. In addition, tin reserves
have increased by 29% to 113 million lbs and zinc reserves by 63% to 414
million lbs. Tonnes of ore have increased by 13%, silver grade by 12%, tin
grade by 14% and zinc grade by 44%. The updated reserves are based on metal
prices of US$9.35/ounce silver, US$3.65/lb tin and US$1.00/lb zinc.
The updated reserves
for Pirquitas, set out below, were estimated using the same pit shell and
database as the initial Pirquitas proven and probable reserves. The initial
reserves were based on metal prices of US$5.35/ounce silver, US$2.75/lb tin
and US$0.42/lb zinc, reported in a news release of April 6, 2006 and set out
in a technical report dated April 28, 2006 and amended as of May 9, 2006. The
updated reserves were estimated by Paul MacRae, P.Eng., a qualified person
under National Instrument 43-101.
Pirquitas Proven &
Probable Reserves November, 2007(i)
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Ore Tonnes Silver Tin Zinc Contained Silver
Class (million) (g/tonne) (%) (%) (oz. in millions)
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Proven 4.35 223.7 0.28 0.87 31.3
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Probable (ii) 16.99 191.6 0.23 0.88 104.7
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Total Reserves 21.34 198.2 0.24 0.88 136.0
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(i) Reserve estimates based on a recovered silver equivalent cut-off
of 75 g/tonne.
(ii) Includes 400,000 tonnes of jig tails grading 234 g/tonne Ag,
0.37% tin and 0.13% zinc.
The updated resources
for Pirquitas, set out below, were estimated using a block model and prepared
by James McCrea, P.Geo., a qualified person under National Instrument 43-101.
Pirquitas Total
Measured, Indicated and Inferred Resources November, 2007(i)
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Tonnes Silver Tin Zinc Contained Silver
Class (million) (g/tonne) (%) (%) (oz. in millions)
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Measured 6.1 191.7 0.23 0.67 37.6
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Indicated(ii) 29.0 152.9 0.16 0.56 142.6
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Inferred 5.1 182.3 0.10 0.24 29.9
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(i) 30 grams silver per tonne cut-off/Includes the Proven and
Probable Reserves set out above.
(ii) Does not include 400,000 tonnes of jig tails grading 234 g/tonne
Ag, 0.37% tin and 0.13 % zinc.
Capital Cost Estimate
and Schedule Update
Following the
production decision for Pirquitas in October 2006, Techint Compania Tecnica
Internacional Saci, an international engineering firm based in Buenos Aires,
was awarded the engineering, procurement and construction management contract
for Pirquitas. Techint's work has progressed to the stage where an updated
cost estimate has been provided for the project of US$220 million plus IVA. To
September 30, 2007, approximately US$40 million of the capital cost had been
paid with firm commitments on a further US$60 million of the capital cost. The
balance of the capital cost to be committed of US$120 million includes a
contingency of US$15 million.
A significant portion
of the increase in capital cost is a result of increased costs in global
construction materials and inflation pressures in Argentina, particularly
labour, since the completion of the initial capital cost estimate of US$146
million plus IVA, which was based on 2005 cost estimates and described in a
news release dated April 6, 2006. In addition, US$13.6 million of the capital
cost increase is related to the revised layout of the plant to accommodate
future expansion of the plant. See Additional Mineralization Identified
below.
A comparison of the April 2006 capital cost estimate and the
detailed engineering capital cost estimate of November 2007 is set out below.
--------------------------------------------------------
April 2006 November 2007
Item Description US$ (in millions) US$ (in millions)
--------------------------------------------------------
Direct Costs
--------------------------------------------------------
Mine 32.9 41.7
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Plant 64.6 106.2
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Tailings 6.3 4.0
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Total Direct Cost 103.8 151.9
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Indirect Cost 21.1 38.7
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Contingency 14.8 15.0
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Owner's Cost 6.4 14.4
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TOTAL COST 146.1 220.0
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Pre-strip development of the open pit and construction of plant
and infrastructure have commenced. As previously advised, the mill is
scheduled for commissioning in the fourth quarter of 2008.
Financial Analysis
The mine is estimated to have a 10 year life, based on proven
and probable reserves, producing an average of 10.9 million ounces of silver
per year. Based on the updated reserve and capital cost estimates, Silver
Standard has estimated the following project after tax net present values on
an all equity basis at reserve and current metal prices.
Summary of Financial Analysis
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Net Present
Metal prices Value(i) Unit Costs(ii)
--------------------------------------------------------------------------
Descrip- Silver Tin Zinc NPV0 NPV5 Cash costs Total costs
tion (US$/oz) (US$/lb) (US$/lb) (M US$) (M US$) (US$/oz Ag) (US$/oz Ag)
--------------------------------------------------------------------------
Average 9.35 3.65 1.00 333.7 189.3 1.51 3.73
metal
prices
for the
two
years
ending
Dec.
31/06
--------------------------------------------------------------------------
LME 14.55 7.28 1.02 868.2 585.8 -2.52 -0.49
Prices -
November
21, 2007
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(i) NPV0 represents net present value at a 0% discount rate/NPV5
represents net present value at a 5% discount rate.
(ii) Cash costs and total costs are per ounce of silver net of tin and
zinc credits.
Additional
Mineralization Identified
In carrying out ore
definition and condemnation drilling, material previously classified as waste
has been determined to contain significant zinc and indium values. Drill
results include Hole AR-183 intersecting 2.15% zinc and 19 g/tonne indium
over 98 meters and Hole AR-177 intersecting 1.21% zinc and 18 g/tonne indium
over 169 meters. Based on these values, Silver Standard has initiated a program
of in-pit and pit wall drilling. As demonstrated on the plan and cross
section attached to this news release (to view please click on: http://www.ccnmatthews.com/docs/sso1126.pdf)
(which are also available for viewing at www.silverstandard.com),
potential economic mineralization exists both in the pit and pit walls.
Drilling will continue at 50 meter centers in order to better define the
mineralization. An updated reserve estimate using all drill data is expected
to be completed in the first half of 2008.
Finances
At September 30, 2007, Silver Standard had working capital of
$140 million, including $108 million in cash, and had expended approximately
US$40 million on Pirquitas. Silver Standard also has $57 million face value
in asset-backed commercial paper, written down to $53.4 million and has
initiated the process for the sale of the Shafter Project in Texas. In
November 2007, Silver Standard granted Standard Bank a mandate to arrange a
syndicated US$75 million project loan on the basis that there would be no
hedging of production. Due diligence is underway with documentation to begin
shortly. Standard Bank is a leading global banking force in resource banking.
It operates from 18 countries in Africa and 20 more on other continents,
including the key financial centers of Europe, the Americas and Asia, with
assets of over $160 billion and over 46,000 employees globally.
With expenditures to date, cash available and the debt facility,
Silver Standard has the funds to complete the construction of Pirquitas and
advance its other projects as planned.
A conference call with management to review the project update
is scheduled on Monday, November 26, 2007 at 8:30 a.m. EST.
Toll-free in North America: 1-866-400-3310
Toronto local and overseas: 1-416-850-9144
Replay will be available for one week by calling toll free in
North America: 1-866-245-6755, passcode 340496; local and overseas callers
may telephone 1-416-915-1035, passcode 340496. The audio file will also be
available on the company's web site after November 26, 2007.
Paul MacRae, P.Eng., Project Manager, Pirquitas, Silver Standard
Resources Inc. (Silver Standard), is the Qualified Person responsible for
process plant and infrastructure, capital and operating costs and proven and
probable reserves; James McCrea, P.Geo., Silver Standard, is the Qualified
Person responsible for mineral resources; and Ken McNaughton, P.Eng., Vice
President, Exploration, Silver Standard, is the Qualified Person responsible
for exploration. Exploration samples were sent to the ALS-Chemex sample
preparation lab in Mendoza, and analyzed in Antofagasta, Chile by total
fusion followed by a 38 element mass spectrometry ICP, including indium.
Samples with over 1% lead, zinc or tin were re-analyzed using a four acid digestion
followed by AA. (Source: Silver Standard Resources Inc.)
To receive Silver Standard's news releases by e-mail, contact
Paul LaFontaine, director, investor relations at invest@silverstandard.com or call
(888) 338-0046.
Statements contained in this news release that are not
historical fact, such as statements regarding the economic prospects of the
company's projects, future plans or future revenues, timing of development or
potential expansion or improvements, are forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of 1995. Such
forward looking statements are subject to risks and uncertainties which could
cause actual results to differ materially from estimated results. 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, 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 or
Canada, 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 filings with the
Securities and Exchange Commission.
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 of 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.
Silver Standard Resources Inc.
Robert A. Quartermain
President
(604) 689-3846
Silver Standard Resources Inc.
Paul LaFontaine
Director, Investor Relations
N.A. Toll Free: 1-888-338-0046 or Direct: (604) 484-8212
Email: invest@silverstandard.com
Website: www.silverstandard.com