KELLOGG, Idaho, Feb. 9, 2006 (PRIMEZONE) -- New Jersey Mining Company (OTCBB:NJMC) (Berlin:NKM) recently updated its mine plan for the Silver Strand mine which is expected to commence production in the second quarter of this year. Increases in both silver and gold prices in the past few months have a very beneficial effect on the economics of the Silver Strand mine. With the silver price not far below $10 per ounce and the gold price about $560 per ounce, the Silver Strand ore will have a net smelter return of $150 per tonne. Operating costs are expected to be $84 per tonne for a seasonal operation producing about 5,000 tonnes per year.
The Silver Strand mine contains reserves of silver-gold ore that will be mined and shipped to the Company's mill near Kellogg, Idaho. Currently, ore reserves and resources stand at 17,500 tonnes with a grade of 5.87 grams per tonne (0.171 ounces per ton) gold and 337 gpt (9.8 opt) silver. The primary focus of the mining operation will be to expand the silver-gold resource by exploring the orebody at depth by driving a ramp downward, and at the same time recover gold and silver from the ore to help finance the exploration. A mining rate of 1,000 tonnes per month is planned for the Silver Strand in a seasonal operation typically operating from April through November.
Management believes that the Silver Strand is an excellent exploration property with potential for a deposit containing up to 100 million ounces of silver equivalent. A comprehensive geophysical survey has recently been completed to help understand the structure of the mine area and to reveal extensions of the known mineralization which are obvious drill targets. A second prong of the exploration plan for the Silver Strand will be to drill these geophysical anomalies from the surface and underground. One of the geophysical anomalies will be intercepted by the ramp planned for the mining operation.
About $300,000 in start-up capital will be required for the Silver Strand mine including infrastructure and reclamation bonding. The initiation of mining operations will be subject to available financing. An environmental operating plan submitted by the Company in April 2003 was approved by the U.S. Forest Service in July 2005. Once mining starts at the Silver Strand, another production shift will be added to the New Jersey mill in Kellogg which currently operates for one shift per day processing gold ore from the Golden Chest mine.
New Jersey Mining Company is involved in exploring for and developing gold, silver and base metal ore resources in the Coeur d'Alene Mining District of northern Idaho. The Company has a portfolio of mineral properties in the Coeur d'Alene Mining District including the New Jersey mine, the Silver Strand mine, the Golden Chest mine, the CAMP project, the Scotch Thistle project, and the Silver Button project.
This release contains certain forward-looking statements within the meaning of the Federal Securities Laws. Such statements are based on assumptions that the Company believes are reasonable but which are subject to a wide range of uncertainties and business risks. Factors that could cause actual results to differ from those anticipated are discussed in the Company's periodic filings with the Securities and Exchange Commission, including its annual report on Form 10-KSB for the year ended December 31, 2004.
Further information about New Jersey Mining Company can be reviewed on the website of the Securities and Exchange Commission at www.sec.gov or on the company's website at www.newjerseymining.com.