Silvermet Inc.

Silvermet Inc.

July 31, 2006 10:01 ET

Silvermet Contracts SNC Lavalin Inc., Montreal, for Feasibility Study Based on Waelz Kilns Operations at Tufanbeyli Zinc Oxide Project, Turkey

TORONTO, ONTARIO--(CCNMatthews - July 31, 2006) - Silvermet Inc., ("Silvermet") (TSX VENTURE:SYI) has engaged SNC Lavalin to prepare a plus/minus, (+15%/-10%) capital and operating cost study for a Waelz Kiln process plant at Tufanbeyli, including, the costs for SNC Lavalin to monitor and control the expenses of outside specialists and consultants in Germany and Turkey. The tests for the Waelz Kiln size and design are to be contracted to a qualified firm in Germany. The environmentals, permitting and site logistics will be performed by firms in Turkey under the direction of SNC Lavalin.

Silvermet will maintain overall control of the project and will participate with SNC Lavalin throughout the study and for the sensitivity and economic analyses to input Silvermet operational experience. The objective is to complete the test-work, studies and the report by year end so that positive steps can be taken towards the start of development of the project, early in 2007.

All engineering and site investigations planned for 2006 relate to the Ackal Pit area (Site #1) roughly in the centre of the 2006 drilling and sampling programs, now under way. Fundamental assumptions relating to ore grades and Waelz Kiln production at this early stage are based on data obtained from previous Cinkom production data and recent assay work on samples tested by Cinkom on materials from the 210,000 tonnes of plus-20% ore already mined at Ackal (1985-1998) and the record of the processing of this material through the Cinkom, Waelz Kiln plant. The obvious overlap of the 2006 drill and test program and the SNC Lavalin assignment can be justified because of the considerable data available from the mining and processing of ore material mined at Ackal and processed through the Cinkom plant. The most critical information remains resource data from completion of the 2006 drill program in October/November.

The zinc carbonate showings on the Tufanbeyli property extend for a total distance of 15 km along the trend of the licensed holdings reflecting the extensive presence of an oxidized Mississippi Valley-type deposit hosted in fore reef breccias or karst breccias within the Devonian limestones. The 2005 exploration program was designed to give a better understanding of the distribution of the known mineralization on the trend, and consisted of geological mapping and geochemical surveying; 6,000 samples were collected. The 2005 and 2006 programs were part of a series of recommendations made by Peter T. George, mining and geological consultant to Silvermet and "Qualified Person" under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), technical reports dated July 7, 2005 and April 30, 2006.

Field data from the main pit at Ackal (Site #1), which is oriented across the strike of the stratigraphy, coupled with data from the geochemical program of field work in 2005 indicate a mineral strike-length in excess of 1.5 km adjacent to the main pit. The resource potential is up to 300 meters wide to a depth below the pit of at least 60 meters. On a purely volumetric basis in the Ackal Pit area there is potential for 35,000-50,000 tonnes of zinc carbonate mineralization per meter along the length of the trend.

In conjunction with the 2006 drilling and sample program, SNC Lavalin will co-ordinate the collection of specific samples for metallurgicial test as follows:

(i) 200 lbs of 15% +/- 1% selected sample for testing by German engineers to design the Waelz Kiln;

(ii) 100 lbs each of samples destined for SGS Lakefield Research bench tests at the approximate grades: 10% zinc; 12%, 14%, 15% and 20% for heavy media bench-scale tests; and

(iii) 10,000 tonnes of mined material grading approximately 15% for plant-size testing through the Cinkom, Waelz Kilns at Kayseri

Pertaining to discussions between Silvermet and SNC Lavalin and the German engineers and SNC Lavalin, the Waelz Kiln capacity has been set at 65,000 tonnes output per annum of zinc in zinc oxide using a feedstock grade of plus-15%. Conceptually, provided that the drill program establishes sufficient run-of-mine (ROM) ore at Site #1 and further along trend to the north at proposed Site #2, two kilns are ultimately contemplated for the new plant.

Tests completed in February 2006 at Lakefield on a lab-scale indicate that a cut-off grade of 10% of ROM ore will yield a feedstock grading approximately 15% zinc using sink-float technology. The field program is directed at determining the quantity of ROM ore available to a 10% cut-off grade. Bench-scale tests as outlined above will be used to confirm this assumption and will also be done at SGS Lakefield Research, Canada

For the following reasons, the proposed Waelz Kiln installation will follow the same basic technology as the Cinkom plant built by SNC Lavalin in 1975/76:

1. demonstrated production using similar ores;

2. availability of information exchange with the Cinkom operations; and

3. ability to test Tufanbeyli feedstock at design grade through the Cinkom plant.

The cost of the feasibility assignment, along with the budgeted extras, is forecast at approximately $1.5 million to the end of 2006. It is anticipated that the Waelz Kiln design, manufacture and transportation to the site will take 12 to 18 months. The planned target for the completion of the feasibility work has been set for year end to position Silvermet to be able to order the design of the kilns by the beginning of 2007.

As stated in the April 30, 2006, technical report, the potential target, quantity and quality are conceptual in nature and there has been insufficient exploration to define the target mineral resource and that it is at present uncertain if future exploration will result in the target tonnage and quality being delineated as a mineral resource.

The information in this release may contain forward-looking information under applicable securities laws. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied by the forward-looking information. Factors that may cause actual results to vary material include, but are not limited to, fluctuations in commodity prices, inaccurate assumptions concerning the exploration for and development of mineral deposits, political instability, currency fluctuations, unanticipated operational or technical difficulties, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions or conditions in the financial markets and the inability to raise additional financing. Readers are cautioned not to place undue reliance on this forward-looking information. The Company does not assume the obligation to revise or update this forward-looking information after the date of this document or to revise them to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.

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

Contact Information

  • Silvermet Inc.
    Clifford H. Frame, P.Eng
    (416) 203-8336
    (416) 203-9483 (FAX)