U.S. Silver Corp.

U.S. Silver produces 634,791 ounces silver in Q1 2009

2009-04-09 17:56 ET - News Release

Mr. Thomas Parker reports

U.S. SILVER REPORTS Q1 PRODUCTION, NI 43-101 TECHNICAL REPORT, OPTION GRANT

U.S. Silver Corp. confirms that during the first quarter of 2009 the Galena mine continued the improved production demonstrated in December, 2008. Silver production for the quarter was 634,791 ounces and exceeded 200,000 ounces in each of the first three months of 2009. Lead production was 1,057,600 pounds and copper production in the quarter was 301,120 pounds.

Thomas Parker, president and chief executive officer of U.S. Silver, stated: "We are very pleased with the effort our work force made during 2008 in exploring and developing new areas for production, allowing the company to report an increase in ore reserves and, at the same time, significantly increase silver production in first quarter, 2009. We have made significant improvements since taking over the Galena mine complex and are optimistic about the opportunities ahead."

The company is also pleased to announce the filing of its updated National Instrument 43-101 technical report entitled, "Galena mine, Shoshone County, Idaho, Technical Report, April 9, 2009," on SEDAR. The technical report follows U.S. Silver's Feb. 27, 2009, press release (see Stockwatch) announcing new estimates for reserves and resources at the Galena mine as at Dec. 31, 2008. The technical report was authored by Daniel H. Hussey, certified professional geologist and manager of exploration of U.S. Silver-Idaho Inc. (a wholly owned subsidiary of United States Silver Inc., U.S. Silver's wholly owned subsidiary), and can viewed under U.S. Silver's profile on SEDAR.

Technical report highlights

Proven and probable reserves at the Galena mine complex near Wallace, Idaho, increased to 20,976,700 ounces of silver contained in 1,148,800 tons of ore at an average grade of 18.26 ounces of silver per ton. This represents a 20-per-cent increase in ounces of silver and a 17-per-cent increase in tons from the previous technical report on the Galena mine dated June 1, 2008.

                             TECHNICAL REPORT HIGHLIGHTS                                
                             (as disclosed Feb. 27, 2009)

                                   Tons     Ag grade      Contained     Cu   Contained
Copper-silver ore                            (oz/t)          ounces     (%)  Cu (tons)

Proven and probable reserves      722,500    23.41       16,912,100    0.70%     5,050
Measured and indicated resources  458,700    18.32        8,403,200    0.61%     2,810
Inferred resource                 557,900    19.49       10,874,200    0.58%     3,260
 
                                   Tons     Ag grade    Contained       Pb   Contained
Lead-silver ore                              (oz/t)      ounces         (%)  Pb (tons)

Proven and probable reserves      426,300     9.53        4,064,600   10.16%    43,320
Measured and indicated resource    75,000    10.69          801,500   10.87%     8,150
Inferred resource                 689,100     8.94        6,158,600    9.45%    65,140

The significant increase in reserves is the result of aggressive exploration and development undertaken by U.S. Silver since gaining ownership and operation of the Galena mine in June, 2006. U.S. Silver intends to continue exploration and development at the property in order to systematically replace mined reserves and resources.

Reserve and resource grades are based on mine chip and diamond drilling samples. All samples are obtained and assays are reported under a formal quality assurance program. Information of a technical nature in this press release respecting the properties has been prepared and reviewed by Mr. Hussey, manager of exploration of U.S. Silver, who supervised the drilling and sampling programs, and resource estimation. Mr. Hussey is a qualified person within the meaning of National Instrument 43-101 of the Canadian securities administrators.

Investor communications option grant

U.S. Silver is also pleased to announce the expanded engagement of MacDougall Consultants Ltd., of London, Ont., to manage investor communications. MacDougall has over 30 years of experience in mining company finance and communications. At the present time, neither MacDougall nor any individuals affiliated with MacDougall beneficially own, control or direct more than 2 per cent of the shares of U.S. Silver. However, depending on market conditions, individuals affiliated with MacDougall may in the future acquire, dispose of and/or beneficially own, control, or direct shares of U.S. Silver. MacDougall's services include, among other things, initiating contacts and facilitating meetings with institutional investors, independent money managers and market-makers. U.S. Silver will retain MacDougall for a period of five years with a provision for suspension after three months or on one month's notice thereafter.

MacDougall will receive, pursuant to the share option plan, options to purchase up to 400,000 common shares of U.S. Silver. The options are priced at 14 cents per share and expire five years from the date of issue, or 30 days from the termination of the agreement between U.S. Silver and MacDougall. Such options are subject to the terms and conditions of the plan, certain vesting provisions, and exchange policies.

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