SOURCE: Sunshine Precious Metals, Inc.

September 01, 2009 16:56 ET

SPMI Clarifies That Legal Controversy Over Sunshine Mine Continues

KELLOGG, ID--(Marketwire - September 1, 2009) - Sunshine Precious Metals, Inc. ("SPMI") clarifies Minco Silver's press release of Sept. 1st where they incorrectly state that "all the issues relating to the Sunshine Mine Lease" regarding Sterling Mining Co. "have been resolved permanently."

"The federal bankruptcy court's recent ruling said that while bankrupt Sterling Mining Co. has a right to cure its defaults on the lease of the Sunshine Mine with us, it also declared that Sterling could not have assigned the mine's lease with us to someone else. Thus, any claim by third parties to an interest in the lease of the Sunshine Mine without our consent is untrue," said Robert Mori, SPMI president.

Mr. Mori continued, "We had an agreement with SNS Silver to pick up where Sterling failed, but Sterling's actions destroyed any opportunity for SNS to employ the Silver Valley."

SPMI is proud to announce the engagement of the law firm Holland & Hart LLP to appeal the Bankruptcy Court's decisions. A "Notice of Appeal" was filed on August 31, 2009, allowing appeal in Federal District Court.

Six years ago, Sunshine Precious Metals, Inc. was confronted with a difficult decision: whether to raze the Sunshine Mine for scrap value or to enable some entrepreneur to return the Sunshine to production and make it possible for several hundred miners to provide silver for the United States and to provide a living for their families.

"We chose the latter," Mori said, "and based upon representations by Sterling Mining Co. that, if we worked with them, they could restore the Sunshine to production."

"However, sixteen months ago, Sterling ceased all communications with us. Their lease of the mine went into default and we served notice to that effect. Then, to our surprise, Sterling Mining Co. ceased production at the Sunshine mine, quit paying its bills, and let all of their people go. They also announced they were abandoning their lease of the Sunshine in press releases and on their own website, dated Feb. 23, 2009. This was exactly the opposite of our intention for this mine and for this property and for the people of the Silver Valley," Mori stated.

Unfortunately, contrary to Minco Silver's Sept. 1st press release, controversy continues.

"SPMI will carry on with its pursuit of restoring the Sunshine Mine through the appeal process," declared Mr. Mori. "We want to return the Sunshine to life. The Sunshine Mine is worthy of far better than Sterling or Minco Silver currently offers."

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    J. Edward Short