Silver Standard Resources expands into Russia

The acquisition of a 35% interest in Geolog, a privately held joint stock company in Russia, will expand the silver assets of Silver Standard Resources (TSE).

Geolog owns the Lunnoe and Arylach silver deposits, 660 km north of the port city of Magadan in eastern Russia.

Silver Standard can earn its interest by spending US$6 million on construction of a 500-tonne-per-day gravity-flotation mill for the processing of Lunnoe ore. It can raise its interest to 37.5% by spending an additional US$1.5 million.

To date, expenditures on the deposits total US$17.7 million, including underground development and partial construction of the mill at Lunnoe.

Plans call for the Lunnoe to be mined by both open-pit and underground methods.

Based on drilling and underground development work to date, the Lunnoe resource is estimated at 9.2 million tonnes grading 428 grams silver and 1.9 grams gold per tonne, including an open-pit resource of 1.2 million tonnes grading 560 grams silver and 4.2 grams gold.

Metallurgical work indicates recoveries will be in the order of 90% for both precious metals.

Yearly output from the Lunnoe mill is projected at more than 180 million grams silver (6 million oz.) and 1.5 million grams gold (50,000 oz.).

Drilling on the Arylach deposit, 30 km north of Lunnoe, outlined a preliminary geological resource in excess of 40 million oz. silver. Grade and tonnage figures were not available by presstime.

Silver Standard commissioned Kilborn Engineering to conduct a due diligence review, which will provide further estimates of reserves and operating and construction costs.

So that construction work can continue simultaneously with the due diligence, Silver Standard will advance Geolog US$800,000.