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Solitario Announces Significant Resource Increase For Its Mt. Hamilton Gold Project, Nevada

Solitario Exploration & Royalty Corp. (“Solitario;” NYSE MKT: XPL; TSX: SLR) and Ely Gold & Minerals (“Ely Gold;” TSX.V: ELY) are pleased to announce a significant resource increase on the Mt. Hamilton gold project in eastern Nevada, U.S.A. A new NI-43-101 compliant resource estimate was completed on the Seligman gold and silver deposit situated roughly 1,500 feet north of the Centennial deposit which contains previously reported reserves and resources. The study was prepared on behalf of Solitario by SRK Consulting (U.S.) Inc. (“SRK”) and serves to update the previously reported (February 22, 2012) Mt. Hamilton Feasibility Study.

The Seligman resource estimate was constrained by an optimized pit using a gold price of $1,500 per ounce of gold and $20.00 per ounce of silver. At Seligman, SRK estimated an in-pit Indicated Resource containing 166,691 ounces of gold equivalent (“AuEq”), with an additional in-pit Inferred Resource totaling 87,929 AuEq ounces. This represents nearly a 29% increase in previously reported in-pit Measured and Indicated Resources for the Mt. Hamilton project and a 134% increase in Inferred Resources. The table below provides greater detail to the recently completed Seligman in-pit resource estimate.

Mineral Resource Statement, Seligman Gold-Silver Deposit, White Pine County, Nevada, July 31, 2012

         

Resource Category

Tons millions

 

Gold Grade Silver Grade* AuEq Contained Ounces
Oz/Ton   g/Tonne Oz/Ton   g/Tonne Oz/ Ton Gold   Silver   AuEq
Indicated 6.96 0.022 0.76 0.097 3.34 0.024 154,388 676,665 166,691
Inferred 3.77 0.021 0.71 0.144 4.94 0.023 78,044 543,671 87,929
 
  • Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that any part of the Mineral Resources estimated will be converted into Mineral Reserves estimate;
  • Resources stated as contained within a potentially economically minable open pit;
  • Pit optimization was based on assumed gold and silver prices of US$1,500/oz and US$20.00/oz, respectively, effective heap leach recoveries of 70% for gold in skarn and 65% for gold in igneous, and 35% for silver, an ore mining and a processing cost of US$6.45/t; and pit slopes of 50°.
  • Gold Equivalent (AuEq) was calculated using a Ag:Au ratio of 55:1 ($1600/ozAu/$29/ozAg); and
  • Numbers in the table have been rounded to reflect the accuracy of the estimate and may not add due to rounding.

The Seligman resource estimate was based on the pre-existing Mt Hamilton database consisting of 531 drill holes. The data was verified/validated by SRK in compliance with NI-43-101 requirements. The Seligman mineralization was mined for several years in the mid-1990’s, but mining ceased in 1997 due to low gold prices. Seligman mineralization, if mined, would require significantly less pre-stripping of waste than the Centennial ore body situated immediately to the south. This could advance initial production by at least six months and reduce initial capital costs by $5.0 to $7.0 million, compared to the Centennial Feasibility Study mining plan that did not include Seligman mineralization. Maps showing the proximity of Seligman mineralization to the Centennial reserves and proposed mine infrastructure can be accessed at http://www.solitarioxr.com/art/Seligman.pdf. Additional project information is found at http://www.solitarioxr.com/hamilton.html.

Chris Herald, President and CEO of Solitario, stated, “Solitario is now well within sight of achieving its objective of growing the Mt. Hamilton resource base to over a million ounces. We are designing a mine plan that considers initially developing part of the Seligman deposit and incorporating this into our soon to be filed Plan of Operations. We are also in the process of completing a 70-hole drilling program that focuses on converting Inferred Resources to Measured and Indicated Resources and to further expand mineralization at both the Seligman and Centennial deposits. The Seligman resource estimate reported in this release does not include any results from the current drilling program. We are also conducting metallurgical, environmental and geotechnical drilling at Seligman as part of our economic evaluation of this deposit.”

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