Penasco expanded

Vancouver — The indicated sulphide resource at the Penasco silver deposit in Mexico’s Zacatecas state has increased by 30%.

The deposit is part of Western Silver‘s (WTC-T) Penasquito project, where a feasibility study has been under way since December 2004. The study is scheduled for completion mid-2005.

M3 Engineering & Technology estimates Penasco has an indicated sulphide resource of 161 million tonnes grading 29 grams silver and 0.57 gram gold per tonne, plus 0.33% lead and 0.72% zinc, at a net-smelter-return (NSR) cutoff of US$3.75 per tonne. The resource is equivalent to 150.2 million oz. silver, 2.97 million oz. gold, 1,065 million lbs. lead, and 2,324 million lbs. zinc.

A further 91 million tonnes are inferred, with average grades of 26.36 grams silver, 0.51 gram gold, 0.25% lead and 0.64% zinc.

Penasco’s overlying oxide resource contains 21.9 million tonnes indicated, and 5.3 million tonnes inferred at an NSR cutoff of US$2.75 per tonne.

M3’s NSR cutoffs are based on metal prices of US$5.50 per oz. for silver, US$350 per oz. for gold, 30 per lb. for lead, and 45 per lb. for zinc.

This Penasquito project’s total measured and indicated sulphide resource (in both the Panasco and Chile Colorado deposits) now stands at 309.8 million tonnes containing 314.3 million oz. silver, 4.59 million oz. gold, 2,101 million lbs. lead, and 5,306 million lbs. zinc. in the Chile Colorado and Penasco deposits which are situated about 1.5 km apart.

M3’s prefeasibility study at Chile Colorado in April 2004 concluded that that deposit could be mined economically with an after-tax internal rate of return of 15.3%.