St. Elias Mines

The N-1 Vein is very important in more than just economical terms. The mere circumstance of finding this new vein is directly pertinent to the credibility of the Quantec geophysics as well. It is pertinent to, and does establish the accuracy of the Quantec and rules out any argument that the drill results present that shows no mineralization. This is partial evidence which fully supports the drill results as being very incomplete, misleading and deceptive. It also depicts very clearly, the intent to present this deception.

In July 2010, we first heard about this new rich vein, via a news release of which I will attach at the end of the post. We have heard nothing more of this vein, despite the impressive trenching performed in that area that had many trenches crossing this vein.

We must realize by utilizing factual material presented by the company, that:

1) this is a mesothermal system basically meaning mineralization is continuous and runs to depths of kilometers below the surface.

2) we know that veins, mineralized structure widens at depth. A very important fact in determining economics and the actual bonanza status of the Tesoro.

3) because of dip hole spacing and other factors associated with the specific geophysics performed on the Tesoro, mineralized veins/zones of less than 5 meters would not be detected. This is very important in discerning that the important veins and mineralized structures do widen at depth, but also, shows many near surface mineralized trends not reported on that were included in the trenching.

4) examine the odds of digging a three meter hole, taking a random sample of a vein that assays 2.57 ounces per ton, with importantly, coarse gold making up about 20% of this assay number. The odds of finding such a rich segment of a vein by a shot in the dark is astronomical. By applying logical reasoning, One then must accept that this vein is very rich. More importantly, to find this vein by using the Quantec, clearly shows that the vein and mineralized structure there, is at least around 5 meters, because this vein was under overburden by several meters and was found by using the data of the Quantec.

Despite the considerable addition the Quantec adds to the richness of the N-1 Vein area, if we only use the facts presented by management, we still come up with a rich economical conclusion, from just this one vein. That conclusion is easily accepted by doing some quick math in your head to know if its feasible to mine this vein at surface or not. The answer is YES, it is very rich.

It is looking like the width of this vein near surface is around 0.3 meters or 18 inches, but the width does not matter and does not play a major part in the economics of this vein from a surface mining perspective at this time. If we apply a 2 ounce per ton average of gold for this vein at surface and aklso understand that ore trucks like Dynacors are capable of transporting around 20 tons of ore, we can most likely easily accept that just one truck load holds about $48,000 at todays gold price. If we realize the cost of machinery and explosives, if needed to mine this vein at surface, I will apply a cost of about $2000 to escavate and load the truck with 20 tons of ore. I will attach a general link to mining equipment and rentals for your consideration. http://www.machinerytrader.com/list/list.aspx?ETID=2&catid=1031

So, if we look at the truck arriving at the mill with $46,000 dollars worth of gold ore that was mined in one day, most likely only hours, then assign an average cost per ton by the mill to get it processed, of about $400 per ton, we are left with $38,000. If we use fact by the company that about 90% of the gold is recovered during processing, we must deduct 10% from the initial value, which is $4,8000, leaving us with a net profit margin of ~ $33,000 for the company SLI.

i HOPE MY simple calculations show everyone how rich the Tesoro is and how very profitable/economical it really is. You actually do not need true drilling or anything else at this time to economically mine the numerous, OVER 50, gold bearing veins of the Tesoro.

Yet again, simple math debunks the frivilous report by Robert Krause that the Tesoro is not economic and blatantly shows the intent by management to deceive.

News Release 2010-28
July 27, 2010

NEWS RELEASE

St. Elias Mines Ltd. New Gold Bearing Vein at Tesoro Returns Assay Results of 2.51 oz/t Gold

Vancouver, B.C. July 27, 2010 Lori McClenahan, President of St. Elias Mines Ltd. (SLI – TSX:V)
(“St. Elias”), is pleased to announce the discovery of a new gold-bearing vein at the Tesoro Gold Project (the “Property”) located in southwestern Peru.

Prospectors engaged to follow up geophysical anomalies from the recent Stage 1 Titan 24 geophysical survey have discovered a new gold-bearing vein (the “N-1 Vein”) near the northeastern area of the Property. The N-1 Vein strikes 330 degrees and dips 75 degrees to the east. Although mainly covered by overburden, the N-1 Vein has been traced for a strike length of 220 meters and is open to the north and south. A sample taken from a 3-meter-deep pit returned assay results of 2.51 oz/t gold across 0.3 meters. Approximately 20% of the gold assay is due to the presence of coarse gold. John Brophy, P.Geo., a qualified person, confirms the width and extent of the vein. Trenching and additional sampling of this area are planned for the future.

Assays and check assays of all samples, including bulk samples, are analyzed by fire assay by ALS Chemex SA laboratory (an ISO certified 9002 facility) in Lima, Peru.

Lori McClenahan, President and CEO, stated “Another excellent development at Tesoro. There is so much going on with this property – high grade veins, bonanza pods, disseminated gold zones on surface, deep drill targets, shallow drill targets. We are very fortunate to have the opportunity to explore this exciting property.”

Tesoro Gold Project

The Tesoro Gold Project is 100% owned by the Company with no underlying royalties. The Property covers approximately 2,000 hectares (5,000 acres) and is part of the well-known gold-bearing Nazca-Ocoña belt that is located in southern Peru. The Nazca-Ocoña gold belt has a long mining history dating back to pre-Incan time. Gold is associated with disseminated to semi-massive sulphides in quartz veins cutting a diorite intrusion. The continuity of the quartz veins and fractures is very impressive in the Nazca-Ocoña belt. While the veins tend to be narrow, the grade is significant and the mineralized structures tend to extend along strike for kilometers and to depths of up to 1,000 meters.

The Tesoro Property has never been evaluated to depth, or to its full strike potential. This leaves a large potential for the discovery of additional mineralization.

Qualified Person

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 a “qualified person” as defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects.

Incentive Stock Options

The Company has granted incentive stock options to certain of the Company’s directors, officers, employees and consultants to purchase up to 500,000 common shares under the Company’s Stock Option Plan. The options will be granted for a period of two years, commencing on
July, 27, 2010 at a price of $1.25 per share.

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) or contact:

ST. ELIAS MINES LTD.

(signed “Lori McClenahan”)

Lori McClenahan,

President

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