UC Resources Ltd. ("UC" or the "Company") is pleased to announce that it has successfully concluded physical testing over the past number of weeks at its La Yesca facility in Mexico. The results of the testing indicate that tailings already processed at La Yesca can be reprocessed by the Company to achieve a reasonable recovery return for silver and gold.
The results from the test showed that approximately 75% of original recovery could be achieved from the reprocessing of tailings previously processed. Other associated costs of production such as cyanide usage and equipment usage are lower on reprocessed tailings, so the Company believes the net result will be that revenues will be closer to approximately 80% of normal, once these factors are taken into account.
The significance of the testing is that the Company will now be able to proceed to process all tailings accumulated in three separate tailings ponds at the site. In order to accommodate this production, the Company has entered into an agreement with Clifton Environmental Services Ltd for the development of a larger tailings pond facility to accommodate the Company's production for the next approximately five years of processing, reprocessing and virgin ore extraction.
"We attribute the positive results of the La Yesca physical testing to the recent improvements we've made to the machinery and personnel at the facility, as well as the cost saving measures we have taken following our analysis of the facility's operations," said Jim Voisin, President and COO of UC.
The Company plans to run a mix of newer tailings combined with older tailings to maximize and extend production as much as possible at La Yesca. This does not include the raw material the Company believes it will obtain through the narrow mining of the XORA concession. The Company announced on December 2012 that it had discovered a significant silver vein structure at XORA.
The Company will begin discussions with a Narrow Vein Mining Contractor firm for the XORA concession. The Company plans to mine, deliver, crush and process this raw material at the La Yesca mill.
The Company is also in negotiations with an off site location to acquire additional higher grade feed to the La Yesca mill operation. The Company has had an extensive testing period at La Yesca. It is also important to note that the Company has not completed an independent feasibility study on the La Yesca milling operation.
The Company is positioning itself now to take advantage of any possible Silver and Gold price increases that may occur in 2013 forward.
Recently the Company contracted an industry specialist to assist the Company in the development of practices, proper reporting and accounting procedures for the Company as it relates to Commercial Production. It will be necessary to accurately and readily report on Commercial Production at La Yesca to regulators and other interested parties. The Company has not yet claimed Commercial Production Status but it is necessary for these reporting functions and procedures to be in place prior to that taking place.
Under IFRS accounting standards, commercial production is determined to have begun when the following are true:
- all major capital expenditures to bring the mine to the condition necessary for it to be capable of operating in the manner intended by management have been completed;
- the completion of a reasonable period of testing of the plant and equipment;
- the ability to produce saleable product (e.g., the ability to produce precipitate / concentrate within specifications);
- the mill has reached a pre-determined percentage of design capacity;
- mineral recoveries are at or near the expected production level; and,
- the ability to sustain ongoing production.
The Company believes that it has demonstrated that it has achieved all of the elements of commercial production except for the final element, "the ability to sustain ongoing production."
In accordance with commercial production reporting requirements, the Company will make any announcement regarding the move to Commercial Production concurrently with the beginning of a Reporting Quarter.
On behalf of the Board of Directors,
Gary Monaghan, Chief Executive Officer