Silvermet Inc.

Silvermet Inc.

August 17, 2006 13:35 ET

Silvermet Inc. Completes Nickel/Copper/PGE Soils Survey on its Optioned Muskox Property, Nunavut

TORONTO, ONTARIO--(CCNMatthews - Aug. 17, 2006) - Silvermet Inc., ("Silvermet") (TSX VENTURE:SYI) announced today that it has completed its soil sampling survey totaling 293 line kilometers and 5,727 samples on an area of 38.7 square kilometers on the Muskox Nickel/Copper/Platinum Group Element (Ni/Cu/PGE) property in Nunavut Territory. Assays and expert interpretations of Ni/Cu/PGE distribution and trends are anticipated to be finalized by late September.

The Silvermet optioned mineral claims lie on the southern extension of the major Muskox intrusion which is one of the world's largest Ni/Cu/PGE intrusions, very similar to the Norilsk intrusion in Russia or the Bushveld Complex in South Africa which host major Ni/Cu/PGE deposits. The Silvermet optioned land claims were assembled by Prize Mining Corporation ("Prize Mining") between 1994 and 2001. The claims are centered approximately 90 kilometers south of the village of Kugluktuk (Coppermine), Nunavut.

Pursuant to its agreement with Prize Mining, Silvermet can earn a 70 percent interest in the claims by incurring not less than $10 million in expenditures by December 7, 2010, of which $4 million must be spent by June 30, 2008. Silvermet is also required to prepare a technical report in respect of such expenditures and to provide the report to Prize Mining by July 31, 2008. Within 30 days of Silvermet acquiring its 70 percent interest, Prize must elect to either continue as the holder of a 30 percent interest in the claims and be responsible for 30 percent of all future expenditures or transfer its interest to Silvermet in exchange for a 10 percent net profits interest on production of mineral products from the properties. Upon the exercise of the option to transfer its interest to Silvermet by Prize Mining, Silvermet will have the option of acquiring 50 percent of the net profit interest from Prize Mining at anytime on payment of $5 million.

Massive and semi-massive Ni/Cu/PGE mineralization has been sampled along the margins of the intrusion, particularly on the east boundary of the Muskox claims. The mineralization encountered is similar to the mineralization at Norilsk in Russia. Within the chromite-rich layered sequences of the Muskox intrusion, elevated PGE content indicates the potential to host stratiform PGE mineralization similar to the Merensky reef in the Bushveld Complex in South Africa.

Drilling near the east boundary of the claims along the basal margin of the intrusive has established a small lens of massive sulphides with an average grade of 1.2% Ni, 2.6% Cu. Two recent Prize Mining drill holes intersected 4.7% Ni, 10.6% Cu, 2.2 g/t Pt and 11.1 g/t Pd over 5.4 m and 3.22% Ni, 7.52% Cu, 2.2 g/t Pt and 17.5 g/t Pd over 5.5 m. No NI 43-101 compliant resource estimates have been completed.

The analytical results and their interpretation from the recently completed soil survey, will guide Silvermet in selecting the most promising targets for further diamond drilling.

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. Silvermet 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)