FYI: With silver lifting offit may be time to look at T.UMG. Well managed, well financed, vertically integrated in Idaho's Silver Valley. Since this article was published they have expanded their exploration property holdings in the area and stuck a deal with NJ mining for their nearby milling facility. Mr. Kaplan may also have it in his sights for take over. I think it is a compelling story which I have been in since it was Scarlet Resources. Take a look. FYI only-not pumping as I am satisfied with it as it stands @ ~$1.13. DYODD.
Regards,
JA_P
United Mining Group Poised For Production In Idaho’s Silver Valley
On May 10th 2010, United Mining Group (CNSX:UMG), formerlyScarlet Resources Ltd., began trading on the CNSX under the stock symbolUMG. UMG is an exploration group with a difference; not only does thecompany own and operate a lucrative mine services company, they’ve alsoentered into an earn-in agreement to earn an 80% interest in theCrescent Mine – a past producing silver mine in North Idaho’s “SilverValley”. Perched loftily in a position of financial stability that mostjuniors can only dream of, UMG is aiming for phase one production withCrescent in Q4 2010 - Q1 2011. All permits and financing are already inplace.
Located in Northern Idaho’s historic Coeur d’Alene district - famouslyreferred to as “The Silver Valley” - the Crescent Mine and its neighborslive up to their provincial name. The Silver Valley is the world’s 2ndlargest silver district, having produced over one billion ounces ofsilver.
Crescent Mine Located Between Sunshine and Bunker Hill Along Strike
Located immediately adjacent, and along strike, of the Crescent Mine arethe Sunshine and Bunker Hill Mines, properties that have producednearly half of the area’s historical one billion ounces.
Although Bunker Hill has produced over 168 million ounces of silver,it is the Sunshine Silver Mine that is widely regarded as one of theworld’s richest past producing silver properties. The property hasproduced over 328 million ounces of silver grading 23 ounces per tonne.To date, the Sunshine Mine is believed to still boast resources of over260 million ounces still to be mined.
Evidence of the promise, potential and inherent allure of theSunshine Mine is in the all out battle for ownership that was won only amonth ago by Silver Opportunity Partners, a company backed bymulti-billionaire Thomas Kaplan. Kaplan’s presence on the Silver Valleyscene is generally regarded as a positive development, with belief thathis finances and ambition will inject some life into the Sunshine Mine,and its neighbors.
The Crescent Mine
Getting back to the UMG property, it’s obvious that the Crescent Mine iskeeping good company. However, consisting of 25 patented claimstotaling about 350 acres plus surface rights to an additional 40 acres,UMG’s property actually has the same size/grade potential as the Bunkerand Sunshine, with the most favorable geological conditions to yield orediscoveries in the Coeur d’Alene district.
Mining at Crescent is characterized by steep, persistent 3 – 10 footveins. These silver bearing veins strike predominantly east – west anddip steeply to the south. “Silver Belt” veins are composed of siderite,quartz and various sulfides including pyrite, tetrahedrite, chalcopyriteand galena. Although substantial amounts of silver are recovered fromgalena, most of the silver is found within the tetrahedrite, whichgenerally contains between 2% and 6% silver by weight.
Resources and Potential
Regarding resources and resource potential, UMG is already in possessionof an NI 43-101 report, conducted by SRK Consulting in March 2009. Theresults read as follows:
With over 5000 vertical feet of historic stoping and more than 6000'of prospective strike length along 12 separate veins between two worldclass mines, the Crescent has excellent potential to produce many timesthe 5-10 year mine life based on the existing resource
What’s more, the company believes that less than 5% of target zoneshas been significantly explored or mined, providing considerablepotential for UMG to add to that resource with continued exploration.
More than $12 million has been spent on the Crescent Mine in the lasttwo years on surface/underground drilling and mine rehabilitationproviding UMG with a deep understanding of the Crescent Mine property.
Mining and Environmental Services
Despite the obvious potential of the Crescent Mine, none of this wouldhave been possible for UMG without the services aspect of their veryunique business model. United Mining Group CEO Greg
Stewart explains what these services entail:
“Mining Services is the backbone of our company. We haveyears and years of experience with underground contract mining whichwill give us a huge edge when we start mining the Crescent Mine. Wefabricate, repair, and rebuild mining equipment, so we can service ourown equipment and be independent of outside suppliers. Our environmentalcontracting division remediates mine sites and works closely with stateand federal regulators. The bottom line - a totally integrated miningcompany.”
Indeed, UMG certainly has a strong revenue platform to grow from.Mining Services generated $15.7 million in revenue in 2009 alone, withan operating income of $3.0 million. Their compound annual growth inrevenue was 77% from 2007 to the end of 2009. Furthermore, theirprojected revenue for 2011 is expected to grow to $30M, as the CrescentMine is brought into production.
The planning for this production is based on recently completed drillresults, underground work, ongoing mine planning and historical mineworkings in the immediate area of the proposed production. The companywishes to emphasize that it has not yet completed a preliminaryassessment as defined by NI 43-101 or a pre-feasibility study withrespect to the Crescent Silver Mine.
Reactivating the Crescent Mine
Within 12 months, UMG will be reactivating the Crescent Mine withproduction scheduled for Q4 2010 – Q1 2011. UMG plans to produce 0.8million ounces of silver in their first year, growing to over 3 millionounces annually within 3 years, with an ultimate goal of becoming anintermediate primary silver producer.
With a market cap of only $27 million, $6.6 million cash from afinancing in May 2010, a stable and profitable mine service division,80% interest in an extremely promising property, an experiencedmanagement team and an admirably unique business model, United MiningGroup is charging, practically hurdle-free, towards their dream ofsilver production.
Follow their progress at www.unitedmininggroup.com
SOURCE: https://www.midasletter.com/news/100723_United-mining-group-silve-crescent-mine-silver-valley-idaho.php
By Claire O’Connor James West
MidasLetter.com
Friday, July 23, 2010