2014-03-26 10:29 ET - News Release
Ms. Lori McClenahan reports
ST. ELIAS MINES LTD. - REPORT OF PERUVIAN OPERATIONS
St. Elias Mines Ltd. has received a report reviewing its complete Peruvian operation. This includes reporting on the company's wholly owned subsidiary, the shutdown and layoff of all employees, its compliance with Peruvian corporate laws, and the economic viability of the Tesoro gold project in southwestern Peru.
The company directed Robert Krause, a geologist with extensive international experience as a mine geologist in narrow-vein mining and an independent director of St. Elias, to assist the board in determining the viability of its Peruvian operations.
Mr. Krause concluded that St. Elias, through its wholly owned subsidiary, complied with all Peruvian laws with regards to laying off of personnel, maintaining the company in good standing, paying of all taxes, and maintaining the Company's Peruvian properties in good standing with regards to Peruvian mining laws and taxes.
Mr. Krause has also concluded, through his investigations, that, in his view, the Tesoro Property is not currently economically viable to put into production due to the logistical hurdles, required capital costs, proximity to nearest water source and fundamentally the narrow vein nature of the Tesoro gold veins. The narrow vein nature, the amount of tonnes that can be mined per shift considering the mining costs per tonne, milling costs per tonne (contract milling vs. building a mill) and the potential gross tonnes of this deposit indicate that the Tesoro Gold Project is not economically viable.
The Board of Directors is disappointed by the results of Mr. Krause's review of its Peruvian operations but accepts the interpretation and plans to move the Company forward.
In addition, Mr. Krause recommends that the Company engage the services of a "qualified person" as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects, to evaluate his investigations and conclusions as he is not a "qualified person" as defined in NI 43-101 and he is a Director of the Company.
