UC Resources Ltd.
TSX VENTURE : UC

UC Resources Ltd.

December 19, 2007 16:05 ET

UC Resources Shareholders Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 19, 2007) - UC Resources Ltd. (the "Company") (TSX VENTURE:UC) - On behalf of the entire management team of UC Resources Ltd., we are pleased to provide this update for our shareholders. The areas of interest have expanded in 2007 and the pace of our activity will accelerate in the coming months, as UC is now involved in exploration/production work in Mexico and exploration in Northern Ontario, Canada. There have been management changes at your company culminating with the appointment of Mr. Jim Voisin as the new President and a member of the board of directors, plus the addition of Mr. Michel Roy, CEO and Chairman of ECU Silver Mining, to the board of directors.

McFauld's VMS Project Update

Last March, in Northern Ontario, the Company announced they entered into a binding option agreement allowing an earn-in up to 55% of the McFauld's Lake area JV between Spider Resources Inc. and KWG Resources. This agreement has UC as the operator during the earn-in phase and ultimately allows the company to earn a controlling interest in the McFauld's Lake property package. UC is of the opinion this region could develop into a world-class base metals exploration camp. Our program objectives are to delineate for drilling Noront Double Eagle look-alike targets plus participate in exploration work to follow up on the earlier work in the area, sufficient to define a much larger massive sulphide deposit that could be of interest to a senior mining company.

Billiken Management continues to manage the entire program. As we reported in May, a gravimetric surveying program was completed which identified a number of additional attractive targets, all with the potential to increase the two known partially drilled off, massive sulphide by several million tonnes. UC's summer work program commenced in June with additional geophysical surveying work, followed by a drill program to test the high priority targets. A successful flow-through financing earlier this year that raised $1.5 million provided the funding necessary to allow this work to proceed.

In light of the recent exploration news in the McFauld's Lake area, involving the exploration efforts of Noront Resources Ltd., this new discovery of nickel, copper and PGM mineralization in a peridotite has significant exploration ramifications to your Company's program. It provides much encouragement to the area, while supporting opinion, that this under-explored area of Northern Ontario will have many surprises as exploration progresses. It is management's opinion (based upon Billiken Management's and our joint venture partner's longevity and expertise in the area), that the Noront discovery may very well represent a magmatic cumulate style copper - nickel occurrence. This discovery by itself may very well set the stage for senior development companies to try to negotiate themselves in the area. Your Company is in an ideal position to deal with such interest.

The Company is presently participating in an airborne survey contract which was awarded to Aeroquest International Ltd. using its helicopter-mounted AeroTEM-2 system and anticipates a report in late December on phase one covering part of its area of interest with more results to follow in January for phase two & three. This is intended to culminate in a proposed drilling plan by Billiken Management on targets of interest which will focus on Noront Double Eagle look-alike signatures. In addition some staking of new claims has been completed by our partners and UC Resources has indicated their intention to participate in the new claims as per the option agreement. The company expects to have drill ready targets and commence a drill program during Q1 2008.

Exploration Update - Copalquin

UC's drilling efforts at Copalquin proceeded at a much slower pace than we originally anticipated, due to a number of mechanical issues with the Company owned drill that required frequent shutdown to repair. There were also delays in sourcing replacement parts and downhole consumables for the drill in Mexico. The property is somewhat remote and the terrain is challenging, nonetheless, we successfully completed a number of drill holes, and the regional exploration work continues in the area. We are however encouraged by the announced drill and assay results from the recent program on the La Soledad vein system.

A complete review of all data required for the mostly completed 43-101 has revealed some data gaps on the property package so the Company plans a 2 phase program over the coming months with phase one now almost completed. Phase one would include checking (lots of channel and character grab samples, maps, photos, pan down slope of any dumps, adits, etc.) all of the known showings through chip and grab sampling, and panning and taking -80 mesh silt samples along all the tributaries that drain the "older volcanics", plus precision surveying - probably GPS + reflectorless laser ranging. The purpose of this work will be to tie in all outcrops, showings, roads and trails etc. This data will finally allow us to produce crisp maps and sections and form the basis of the ongoing compilation work that has yet to be completed. The results of this work can then also be incorporated into the baseline 43-101 which is near completion and assist in phase two decisions.

Phase two will involve diamond drilling of the high grade La Soledad vein system and other newly defined targets. This should commence mid Q1 2008 and is anticipated to involve approximately 2000 metres of drilling. The drill intercept spacing in the type of low sulphidation gold/silver occurrence we are dealing with requires that pierce points be tightly spaced along strike and to depth. This detailed drill pattern is required for a compliant preliminary resource estimate. Once the drilling is well underway (10-15 pierce points), an independent engineering firm will be brought in to evaluate the resource as it stands, and provide a preliminary report on the resource size and grade. With the concentrations of gold (around 1 ounce per ton) and silver (around 100 ounces per ton) received in holes MP-06-07 and MP-07-001, it is now imperative to put in place a very rigorous QA/QC program, so that all requirements for a resource are met. The La Soledad occurrence represents just a small part of the total property area of interest that is controlled by your Company, but this is the most advanced discovery area so far and therefore it is important to document the potential that has been outlined so far. Management also plans to start a more extensive regional exploration program and follow-up previous drilling success at El Refugio and El Cometa zones.

In addition the Company is planning a much larger regional baseline exploration program which is still under discussion and design which is intended to exploit the sizeable 152,000 hectare land position presently controlled by UC.

La Yesca Production Update

The Company remains committed to achieving successful commercial production at its tailings operation at La Yesca as one of the key goals going forward. Although we have not yet commenced commercial production which was a target established for 2007, we have made many steps forward at La Yesca, and have achieved limited test production runs over short stints during the initial startup and commissioning of the new plant. However, no commercial volumes of precipitate have been produced as of yet.

Recent changes involved alterations to the milling and leaching equipment and enhancing the material flow and this is an ongoing process. In order to optimize the recovery of gold and silver, further additional experimentation with the metallurgical processes have been undertaken such as the grinding of the tailings, varying the concentration of the reagents to release and then capture the gold and silver from the tailings, adjusting the timing of the treatment cycle, as well as the installation of a much larger thickening tank to improve the recoveries. The Company has been running numerous tests at UC's new laboratory installation in Guadalajara.

UC has also undergone significant changes in our staff in Guadalajara/La Yesca, both in the office and at the mill site, in an effort to improve the quality and efficiency of our staff. UC has hired a new plant manager (Canadian), as well as new metallurgists support, a chemical engineer, and a new chemist to replace the previous plant manager and metallurgists that were initially on staff at La Yesca. With the addition of these new staff members, the test-work has progressed. The purchase of the necessary laboratory equipment is almost complete, including the addition of a new atomic absorption unit. With this latter addition to the lab, UC now will have the ability to complete its own chemical analysis at various points in the plant flow, in a much more timely and efficient manner. UC will no longer need to rely on outsourcing the analysis during this critical commissioning phase at La Yesca.

UC is anxious to advance to the commercial production level, but it is necessary to determine all of the variables in order to achieve the most efficient operation. To this end UC Resources has also retained the services of an outside process management consultant to further assist the new plant management team in completing the commissioning phase as soon as possible. The Company expects to commit further funds to this process but is confident that La Yesca will meet the original profit expectations the acquisition was based on.

La Dura Gold / Silver property Acquisition Update

The closing of the La Dura property acquisition has been delayed extensively due to negotiation to resolve outstanding debt on the property that was discovered as part of your company's legal due diligence on the property (land tenure checking). Although La Dura is still of interest to UC Resources due to the merits of the property as a potential gold/silver producer with infrastructure (mine and mill) already in place, it has been mutually agreed with the vendor of the project that the LOI is no longer binding given the time delays that have occurred. UC will keep shareholders apprised of any further developments with La Dura.

Recent events

Your Company also continues to review new property acquisition targets, both potential quick to production assets and pure exploration opportunities. We are also reviewing an existing asset the Mar property for a future drill program.

Your Company has recently experienced a very lengthy audit process much longer and more detailed than expected. This caused some delays in filing which unfortunately led to the stock being halted. We would like to apologize to our shareholders for this delay and assure all shareholders that your Company supplied material and answered all questions in an expedient and timely manner as should be expected. The audit process is driven by the auditors not the Company. The Company was aware that some changes were required to management controls prior to this audit and takes this process very seriously and is committed to making what changes it can to ensure this event is not repeated in the future. To this end we have retained new auditors who will work more closely with the Company.

With the closing of the recent private placement with PowerOne Capital Markets, the Company has the capital required to advance its numerous corporate objectives. Your board of directors and management team are committed to advancing the key projects forward and to enhancing shareholder value while maintaining active communication with its shareholders. I thank all of our shareholders for their patience and support as we work to achieve our strategic goals in 2008.

On behalf of the board of directors,

Gregory Roberts

Gary Monaghan

Jim Voisin

Michel Roy

Investors are invited to visit the UC Resources IR Hub at http://www.agoracom.com/ir/UCResources where they can post questions and receive answers or review questions and answers already posted by other investors. Alternatively, investors are able to e-mail all questions and correspondence to UC@agoracom.com where they can also request to be added to the investor e-mail list to receive all future press releases and updates in real time.

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings which are available at www.sedar.com.

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

Contact Information

  • UC Resources Ltd.
    Damien Lowry
    Vancouver Head Office
    Toll Free: 1-800-366-8566 (Canada & USA)
    Website: www.ucresources.net