War Eagle Mining Company Inc.

War Eagle Mining Company Inc.

August 17, 2005 13:27 ET

RETRANSMISSION; War Eagle Mining Company Inc.: Surface Diamond Drilling Commences; Underground Channel Sampling Confirms High Grade Zinc and Germanium Mineralization at Tres Marias

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 17, 2005) - War Eagle Mining Company Inc. (TSX VENTURE:WAR) The Company is pleased to announce that the 6 Hole, 1,300 meter surface diamond drilling program outlined in War Eagle's July 13, 2005 Press Release has commenced; progress reports will be released in the near future. This exploration drilling will test three large solution collapse structures and fault intersections visible on surface that display coincident, highly anomalous geochemical values that are up to 500 metres from the Tres Marias shaft. (See Photo available on the Company's web site.)

The initial results of the underground channel sampling program have returned excellent assay values comparable to results reported by Mineva Kennecott de Mexico S.A. in 1996. The assays from a total of 138 one and one half (1-1/2) meter long horizontal channel samples averaged 339 grams Germanium (Ge); 45 Grams Gallium (Ga); 0.86% Lead (Pb); and 22.17% Zinc (Zn) (See Map and Table on web site). These samples were taken around the external periphery and pillars of a portion of the mineralized zone on the 6-1/2 Level mined by Zinc Nacional de Mexico and are distributed over a lateral extent of roughly 20 meters by 50 meters. This implies that at least approximately 4,000 tonnes of mineralization per vertical meter was mined from the 6-1/2 Level from this portion of the deposit alone and augers well for War Eagle to achieve the anticipated minimum economic threshold of 500,000 tonnes.

The mineralized zone at this depth consists of a mixture of Zinc Silicate (Hemimorphite), Zinc Oxide (Smithsonite) and minor Zinc Sulphide (Sphalerite) mineralization which War Eagle anticipates can be concentrated to a saleable Heavy Mineral Zinc concentrate by Heavy Media Separation (Sink/Float) processing. The Germanium is interstitially locked within the Zinc Minerals and is recovered in conjunction with the Zinc.

Channel Sampling is on-going and will be undertaken throughout the accessible portions of the historical workings; further channel sampling results will be forthcoming shortly. In addition, long hole drilling coupled with sludge sampling, as well as underground diamond drilling will commence shortly in an effort to delineate the lateral and vertical extent of mineralization beyond previously mined areas. Upon completion of this program, War Eagle expects that sufficient mineralization will have been identified to estimate resources and reserves for the property.

The Market Price for Germanium is presently quoted at approximately US$600/Kg. while Zinc is presently selling for about US$0.58/lb. The average assay values for Germanium (Ge) of 339 grams and Zinc (Zn) of 22.17% represent a contained Ge content of about 0.4 Kg./Tonne along with 490 lbs per tonne of Zn.

Underground channel sampling is being conducted under the guidance of War Eagle's Dr. David Hackman, Ph.D. (Director) who supervises the Tres Marias Exploration Program. All accessible walls composed of mineralized breccia in the mine are being sampled by cutting a continuous, waist high channel, 5 cm deep by 10 cm wide, along the walls using a diamond saw. Channel samples weighing about 10 Kg. each are extracted from 1.5m increments between the saw cuts by use of a pneumatic chipping hammer. Individual sample locations are spray painted onto the walls for future reference.

Samples are sent to the Technical Institute in Hildalgo del Parral, Chihuahua where they are crushed in two stages to minus 10 mesh before being split to provide a 500-gram sample which is shipped to CSAL Inc. in Tucson. CSAL Inc. is an Arizona State registered Assayer. Samples are then pulverized to - 200 mesh and analyzes for Zinc by titration. Germanium, Gallium and Lead contents are determined using ICP methods.

Quality Control and Quality Assurance (QA/QC) measures are being implemented both on-site, and throughout the sampling, handling, transportation, and analytical processes to ensure data integrity. Approximately 10% of the pulps are sent to ALS Chemex in Vancouver for check assaying.

War Eagle Mining Company Inc. has contracted the services of an independent professional mining engineer, Mr. Glenn R. O'Gorman, P. Eng, to assist in the preparation of this Press Release. Mr. O'Gorman undertook a site visit of the Tres Marias Property during August of 2002.

The Tres Marias project is under the direction of Terence Schorn, P.Geo, the qualified person pursuant to the National Instrument 43-101.

Photo's and detailed Sample Analytical reports for the Tres Marias Project are available on the Company web site at www.wareaglemining.com.

The Company announces a private placement of up to 599,000 units at a price of $0.40 per unit, subject to the approval of the TSX Venture Exchange, for proceeds to the Company of $239,600 (US$200,000). Each unit will consist of one common share and one non-transferable share purchase warrant entitling the holder to purchase one common share of the Company at a price of $0.50 per share for a period of one year from the date of issuance. A financial consultant fee may be payable in accordance with the policies of the TSX Venture Exchange. The proceeds of the private placement will be used for general working capital purposes. In addition, the Company in pleased to announce a director's option to Donald Padgett as to 35,000 shares at $0.45 cents per share for a period of 3 years.

Terence F. Schorn, P. Geo, President

War Eagle Mining Company Inc.

CUSIP. No. 933901209

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • War Eagle Mining Company Inc.
    Bob Faris
    Vice President, Corporate Development
    1-800-877-1626 or (604) 606-7973