US Silver adds ounces at Galena

U.S. Silver (USA-V) is boosting silver reserves and resources at its Galena mine complex, near Wallace, in Idaho’s famed Silver Valley.

The Toronto-based junior, formerly known as Chrysalis Capital III Corp., acquired the mine last June, and has been active exploring and developing the asset ever since.

Success at the end of the drill bit coupled with stronger silver prices have allowed silver reserves at Galena to rise 40%. Total reserves and resources ring in at 48 million oz. silver, up 17%.

Proven and probable reserves now stand at 758,000 tons grading 19.99 oz. silver per ton, or 15.1 million contained ounces silver, plus 4,800 tons copper and 15,300 tons lead.

Another 1.1 million tons of measured and indicated material grade 12.6 oz. silver, and 1.6 million inferred tons grade 11.37 oz. silver. All three categories have similar byproduct copper and lead credits.

For its calculations, U.S. Silver used prices of US$10.00 per oz. silver, US$2.30 per lb. copper and US55 per lb. lead.

The cutoff grade was 14.5 equivalent oz. silver per ton.

U.S. Silver says a desirable silver-bearing galena accounts for 9% of its silver reserves and 28% of total silver resources. Happily, lead contained in lead-silver reserves rose by almost 75% year-over-year.

In another key development earlier in April, U.S. Silver signed a smelter contract with Teck Cominco (TCK.B-T, TCK-N) to process lead-silver concentrates from Galena’s newly discovered high-grade lead-silver zones.

The junior says its lead-silver ore will be processed at its formerly idled Coeur mill while the Galena mill continues to process silver-copper ore.

The Coeur mill is scheduled to start shipments to Teck’s smelter in September 2007, with mill repairs slated to be completed by August.

U.S. Silver says that development of lead-silver resources within Galena are under way and will be ready for mining by August.

Initial development activities will begin on the mine’s 2400, 3000, and 3700 levels.

U.S. Silver recounts how some of the lead-silver zones on Galena’s 3000 level were first developed between 1950 and 1953. As this lead-silver zone was developed, drifting began toward what became known as the Silver Vein discovery in 1953. This discovery changed the focus of the mining away from lead-silver ores to high-grade silver-copper ores.

Since 1953, the Silver Vein complex has produced more than 100 million oz. silver. Today, some 4 million oz. silver and 2.5 million lbs. copper remain in the Silver Vein.

With two drill rigs operating underground, U.S. Silver plans to further explore and develop the asset through the rest of the year in order to expand and upgrade resources and reserves, with 80,000 ft. of drilling budgeted this year.

The company will also explore the rest of its 17-sq.-mile land position surrounding the Galena, Coeur and Caladay properties.

The company says a National Instrument 43-101-compliant technical report on Galena’s reserves and resources will be filed on Canada’s SEDAR within 45 days.

By the end of the year, with both mills running, U.S. Silver’s production is expected to be as much as 1,000 tons per day of combined production.

For all of 2007, the company expects production to exceed 3 million oz. silver, 2 million lbs. copper and 3.5 million lbs. lead.