SNS Silver Corp.

SNS Silver Corp.

March 02, 2009 06:00 ET

SNS Silver Signs LOI on Historic Sunshine Mine

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 2, 2009) - SNS Silver Corp. (TSX VENTURE:SNS) and the owner of the Sunshine silver mine late Saturday signed a letter of intent whereby SNS will continue providing care, maintenance and development of the Sunshine Mine during the final stages of the lease negotiations.

The letter calls for SNS to make an initial non refundable $250,000USD payment, the companies have agreed to have definitive agreement by March 28th. Both parties have agreed not to entertain any offers during this period.

"This is a new dawn for the Sunshine," said SNS President and CEO David Greenway. "Mr. Mori (President of SPMI) has been a pleasure to work with, and we look forward to a long and mutually beneficial relationship with a shared goal of maintaining and developing this historic silver mine," Greenway said.

Added Mori, "SNS Silver brings a high level of experience and competence on both the mining and finance side, which will be much needed in the months and years ahead to ensure the Sunshine's mines success - I have great confidence that the SNS team will endeavor to make this project a success."

Sterling Mining Co., citing financial difficulties and an inability to keep the mine in working order as required, surrendered its lease on the Sunshine to SPMI on Feb. 19th. In the interim, SNS Silver agreed to assume maintenance, security and utility costs at the mine in order to prevent any degradation of the property. Two former Sterling employees already have been retained by SNS in furtherance of that goal, Greenway said.

The Sunshine Mine has been North America's most prolific primary silver mine, over the last 100years, having produced more than 350 million ounces of high grade silver since its discovery in 1884 - an amount greater than that produced by the famed Comstock Lode in Nevada. The mine has produced between 4 million and 5 million ounces of silver annually through 2001 and has been as high as 12million ounces one year in the late 1930's the average grade was over 40 ounces per ton. A Canadian National Instrument (N.I.) 43-101-compliant report completed by Behre Dolbear & Co. in September 2007 listed reserves and resources in all categories for the Sunshine Mine at 231,528,312 ounces of silver, including 23,486,698 ounces in proven and probable reserves. "The Behre Dolbear & Co. 43-101 report is Historic in nature and SNS has not confirmed the Resource Cal in the report. Its use here is illustrative and SNS will retain Behre Dolbear & Co. to upgrade the report to SNS in the ordinary course of the business of the Company."

"The Behre Dolbear report if confirmed works out to about 6 ounces of silver in all categories for each share of SNS Silver existing today," Greenway commented.

The Sunshine Mine's infrastructure includes a 1,000 ton-per-day flotation-type concentrator and two operational multi-compartment shafts and hoists, along with some 200 miles of internal shafts (winzes), drifts and other workings.

A definitive lease agreement between SPMI and SNS, including an indemnification by SPMI on SNS' behalf for any third-party claim or suit brought against SNS "to the extent action is based upon a claim arising out of acts, omissions or misrepresentations by SPMI to which they are also a part, including suits by Sterling or any other party arising out of SPMI's previous lease arrangement with Sterling," the letter of intent states. The lease agreement will be subject to approval by the TSX Venture Exchange.

SNS Silver Corporation (TSX VENTURE:SNS) is an exploration mining company, whose primary asset is the 100% owned Crescent Mine located in Kellogg, Idaho - one of the largest silver districts in North America with over one billion ounces of silver produced in the last 100 years. The property consists of 24 patented mining claims over approximately 350 acres, alongside 40 acres of surface rights. The Company currently has a comprehensive and well-funded drill program underway. SNS's main focus is on upper country surface drilling and underground drilling on the Alhambra and South Veins. Silver Wheaton currently owns approximately 12%. The Company has approximately $2.8 million in cash in addition to the outstanding $2.0 million receivable from Andover Ventures.

Historical resource estimates quoted herein are based on data and reports obtained and prepared by previous operators. The Company has not completed the work necessary to independently verify the classification of the mineral resource estimates and is not treating the mineral resource estimates as National Instrument 43-101 defined resources verified by a qualified person. The historical estimates should not be relied upon. The Crescent Mine will require considerable further evaluation, which the Company's management and consultants are in the process of completing.

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

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