365M OZ PRODUCER REBORN
Sunshine silver mine ships 1st new concentrate in five years
Sterling Mining Tuesday shipped its first concentrate Thursday after resuming production at one of the nation’s best known historic silver producers, Idaho’s Sunshine Mine.
Author: Dorothy Kosich
Posted: Friday , 21 Dec 2007
RENO, NV -
The name "Sunshine Mine" has been associated with one of the world's great silver mines, one of the worse mine disasters in U.S. history, and financial ruin.
However, on Thursday Idaho's Sunshine Mine once became a producer as Sterling Mining (TSX: SMQ) reported it had resumed initial production at the mine and shipped its first concentrate Thursday morning.
First staked in 1884, various contiguous holdings were consolidated to become the Sunshine Mining Company. By 1921, a mill was constructed and the Sunshine mine was born.
On May 2, 1972, Sunshine would also become the site of one of the nation's worse mining disaster as 91 men died from carbon monoxide generated by a fire. Only two of the 93 men trapped inside the mine made it out alive.
The mine operated for decades after the fire, and even produced 11.5% of the nation's total silver output in 1981. By the end of 1988, the mine had reached its full production; hit a peak production of 5.4 million ounces of silver in 1991, and eventually yielded nearly 365 million ounces, making it one of the nation's richest silver producers.
However by the summer of 1982, the Sunshine Mining Company announced it would suspend production, based on low silver prices, a lack of regular and consistent exploration, and a lack of development activities. At closure mine reserves were 1.13 million tons containing 26.75 million ounces of silver. These historic reserves were later reclassified as mineral resources.
The mine remained closed until Sterling Mining Company won control of the Sunshine mine in 2003 by paying the mine's back taxes. Sterling acquired a lease with option to purchase agreement from Sunshine Mining. The property now consists of owned and leased blocks of 202 patented claims and 184 unpatented mining claims, for a mineral rights position of 5,930 acres and three surface right blocks of 423 acres. The mine has a 100 year database of detailed geological, mineralogical, mineral grade and infrastructure related to vein deposits.
In a 43-101 report completed in April 2007, mining consultant Behre Dolbear estimated that Sunshine has 23,486,698 ounces of proven and probable silver reserves. Measured and indicated ounces are estimated at 31,154,355 ounces.
Since mid-2003, Sterling has worked to rehabilitate the mine and facilities to resume production. Sunshine Mine resumed mining activities at the lower level this week with Sterling crews mining at the 2,700-foot and 3,100-foot level workplaces, which were idled at closure.
In a news release Thursday, Sterling President Ray De Motte said, "The credit for this historical event goes to the men and women at the Sunshine Mine. Without their expertise, teamwork and relentless efforts this simply would not be possible. We are grateful to the community, employees, vendors, support of shareholders, investors and investment banker TD Securities Inc. and Blackmont Capital Inc., and look forward to achieving our goal of long-term sustainable production."
The economics of the Sunshine mine are based on a seven-year mine plan that fully mines all of the proven and probable reserves. The mine capital cost estimate includes $13.2 million in pre-production capex and $2.58 million in sustaining capital over the life-of-mine plan.
The 43-101 report outlines a 2.8 million-ounce silver production forecast for 2008 with additional lead and copper credits. The first shipment of concentrate is being processed at Teck Cominco's Trail British Columbia smelter, according to Sterling.
Behre Dolbear estimated that payback for the estimated $28 million that Sterling has spent in capital and expenses prior to production will be recovered in just less than three years.
Sunshine Mine also resumed mining activities on the lower levels.
"The Sunshine Mine has considerable potential to add resources and reserves," according to the 43-101 report. "There are many areas of the mine that previously had only perfunctory exploration performed on them. This situation resulted from property boundary issues...and from the difficulties in performing exploration on the veins of the neighboring properties that are now leased by Sterling."
"It should be expected therefore, in light of the previous long mining history of the Sunshine mine, that additional resources and reserves will be discovered," Behre Dolbear concluded.
Sunshine silver mine ships 1st new concentrate in five years
Sterling Mining Tuesday shipped its first concentrate Thursday after resuming production at one of the nation’s best known historic silver producers, Idaho’s Sunshine Mine.
Author: Dorothy Kosich
Posted: Friday , 21 Dec 2007
RENO, NV -
The name "Sunshine Mine" has been associated with one of the world's great silver mines, one of the worse mine disasters in U.S. history, and financial ruin.
However, on Thursday Idaho's Sunshine Mine once became a producer as Sterling Mining (TSX: SMQ) reported it had resumed initial production at the mine and shipped its first concentrate Thursday morning.
First staked in 1884, various contiguous holdings were consolidated to become the Sunshine Mining Company. By 1921, a mill was constructed and the Sunshine mine was born.
On May 2, 1972, Sunshine would also become the site of one of the nation's worse mining disaster as 91 men died from carbon monoxide generated by a fire. Only two of the 93 men trapped inside the mine made it out alive.
The mine operated for decades after the fire, and even produced 11.5% of the nation's total silver output in 1981. By the end of 1988, the mine had reached its full production; hit a peak production of 5.4 million ounces of silver in 1991, and eventually yielded nearly 365 million ounces, making it one of the nation's richest silver producers.
However by the summer of 1982, the Sunshine Mining Company announced it would suspend production, based on low silver prices, a lack of regular and consistent exploration, and a lack of development activities. At closure mine reserves were 1.13 million tons containing 26.75 million ounces of silver. These historic reserves were later reclassified as mineral resources.
The mine remained closed until Sterling Mining Company won control of the Sunshine mine in 2003 by paying the mine's back taxes. Sterling acquired a lease with option to purchase agreement from Sunshine Mining. The property now consists of owned and leased blocks of 202 patented claims and 184 unpatented mining claims, for a mineral rights position of 5,930 acres and three surface right blocks of 423 acres. The mine has a 100 year database of detailed geological, mineralogical, mineral grade and infrastructure related to vein deposits.
In a 43-101 report completed in April 2007, mining consultant Behre Dolbear estimated that Sunshine has 23,486,698 ounces of proven and probable silver reserves. Measured and indicated ounces are estimated at 31,154,355 ounces.
Since mid-2003, Sterling has worked to rehabilitate the mine and facilities to resume production. Sunshine Mine resumed mining activities at the lower level this week with Sterling crews mining at the 2,700-foot and 3,100-foot level workplaces, which were idled at closure.
In a news release Thursday, Sterling President Ray De Motte said, "The credit for this historical event goes to the men and women at the Sunshine Mine. Without their expertise, teamwork and relentless efforts this simply would not be possible. We are grateful to the community, employees, vendors, support of shareholders, investors and investment banker TD Securities Inc. and Blackmont Capital Inc., and look forward to achieving our goal of long-term sustainable production."
The economics of the Sunshine mine are based on a seven-year mine plan that fully mines all of the proven and probable reserves. The mine capital cost estimate includes $13.2 million in pre-production capex and $2.58 million in sustaining capital over the life-of-mine plan.
The 43-101 report outlines a 2.8 million-ounce silver production forecast for 2008 with additional lead and copper credits. The first shipment of concentrate is being processed at Teck Cominco's Trail British Columbia smelter, according to Sterling.
Behre Dolbear estimated that payback for the estimated $28 million that Sterling has spent in capital and expenses prior to production will be recovered in just less than three years.
Sunshine Mine also resumed mining activities on the lower levels.
"The Sunshine Mine has considerable potential to add resources and reserves," according to the 43-101 report. "There are many areas of the mine that previously had only perfunctory exploration performed on them. This situation resulted from property boundary issues...and from the difficulties in performing exploration on the veins of the neighboring properties that are now leased by Sterling."
"It should be expected therefore, in light of the previous long mining history of the Sunshine mine, that additional resources and reserves will be discovered," Behre Dolbear concluded.
