(TSX Venture Exchange)
Clearing Symbol: SELSF
TESORO GOLD PROJECT
Lori McClenahan, President
of St. Elias Mines Ltd. (the “Company”), is pleased to provide the
following update with respect to the ongoing underground exploration and
development program at the Tesoro Gold Project (the “Project”)
located in southwestern Peru.
The Company is continuing
with its plan of development for the Project (refer to News Release dated May
The objective of the
plan is to
develop the Project by
incrementally expanding the operation from artisanal levels of production
through to a profitable production level while concurrently defining resources
The Company is preparing both the Zona Canchete and the Zona Central for
an initial combined sustainable production rate of 300-500 tonnes per month(1)
by undertaking shaft sinking and level development on these veins and
concurrently producing approximately 100 tonnes per month from mine development
during the pre-production, development and exploration period.
This is a forward-looking statement.
Forward-looking statements address
future events and conditions and therefore involve inherent risks and
Actual results may
differ materially from those currently anticipated in such statements.
There is no guarantee that the Company
will achieve these objectives.
An additional 58.9
of development material has been shipped from the Property to the milling
facility of Toronto-listed
Malaga Inc. (
Mines Incorporated) located immediately north of the Property.
Included in this material is 41.08
tonnes from the A4 Vein System at Zona Central and 17.8 tonnes from the ZCV#1
Vein at Zona Canchete.
is scheduled to be processed within the next week.
Zona Central and Zona
Canchete, located within the northern area of the Property, are two of five
gold-bearing zones identified to date on the Property.
A map showing the location of the Zones
within the Property can be viewed at http://www.steliasmines.com/properties/PeruFig3.pdf
Zona Canchete - Development
The ZCV#1 shaft has now been
extended to a depth of approximately 75 meters below surface.
The ZCV#1 Vein persists to this depth
and continues to be consistent and high grade (1.0 oz/t.)
o date, the Company has
completed more than 450m (1,500 feet) of underground development at the ZCV#1
In addition, a total of 233
tonnes of bulk sample material from ZCV#1 Vein has been
processed and returned an average grade
of 0.961 oz/t gold.
Zona Central - Development
The A4 Shaft has been deepened
to 62 meters below surface and ventilation raises (to surface) are almost completed
at 12m north and 50m south.
Vein System pinches and swells, but continues to return moderate gold grades
with pockets of multi-ounce material.
o date, the Company has
completed more than 240m (770 feet) of underground development at the A4 Vein
In addition, a total of 157.39
tonnes of bulk sample material from A4 Vein System has been
processed and returned an average grade
of 0.948 oz/t gold, although shipments included two small pockets of very
high-grade material (3 to 11 oz/t gold.)
Diamond drilling will guide
the development activities at both Zona Canchete and Zona Central.
The Company has developed a drill plan
for each of the ZCV#1 Vein and the A4 Vein System.
Initially 4 or 5 strategically placed
holes will be drilled on each system to guide shaft deepening (to 100m) and
level development (at 50m intervals.)
Subsequent systematic drilling (surface and underground) of both vein
systems will follow in order to delineate resources and reserves for mining.
As previously announced, the
Company recently purchased its own diamond drill and related equipment.
The Company’s ownership of a
diamond drill will provide significant savings in drilling costs and substantially
expedite the development of the Project.
The drill is on site and personnel have been trained.
Drilling will commence within a week
whereupon the Company will begin to implement its development plan.
Mining and Exploration Plan
The objective of the plan is to achieve a
sustainable economic production to support two to three years of production at
a rate of 300 to 500 tonnes per month while concurrently defining resources and
It is not possible to
define a significant quantity of proven and probable reserves with diamond
drilling alone in a narrow vein system (see note(2)
In addition to diamond drilling, St.
Elias must carry out underground exploration and development, as well as,
establish a production history in order to define reserves.
Historically, most of the major Canadian
vein type gold mines (including Red Lake, Val d’Or, Timmins, Bralorne,
etc.) rarely had more than a couple of years of reserves that would meet
today’s definitions set out in National Instrument 43-101.
They all started off as small producers
and gradually expanded their production as reserves expanded.
All technical work is being supervised
by, and the contents of this news release have been verified by, John Brophy,
P.Geo, a Canadian geologist residing in Peru
, who is an independent
qualified person as defined in National Instrument 43-101, Standards of
Disclosure for Mineral Properties.
The Tesoro Gold Property is 100% owned
by the Company with no underlying royalties.
The Property, located in the prolific
300km x 30km Nazca-Ocoña gold belt of southwestern Peru
multiple epithermal gold-bearing veins which have been traced for a strike
length of over 6.5km.
To date, more
than 70 gold deposits have been exploited in this region.
The Property is located between two gold
Malaga Inc. T-MLG (formally
Dynacor Mines Ltd.), the
owner of the claims located immediately northwest of the Property, published a
gold resource of +606,611 oz at 16.4g/t (on only 3 of 10 veins discovered to
date) and has subsequently announced the discovery of additional veins carrying
comparable gold grades.
For additional information on St. Elias
and its projects, please visit us at www.steliasmines.com or call
1-888-895-5522 (toll free US and Canada
ST. ELIAS MINES LTD.
(signed “Lori McClenahan”)
The TSX Venture Exchange has not reviewed
and does not accept responsibility for the adequacy or the accuracy of the
contents of this document.
This news release contains forward-looking statements
regarding the ongoing and upcoming exploration work and expected geometry of
geological formations and structures.
Actual results may differ materially from those currently anticipated in