U.S. Silver Corporation announce that Thomas Parker will become the Company’s interim Chief Executive Officer (”CEO”) effective immediately. Mr. Bruce Reid, the former CEO, will remain as a consultant to the Company. Mr. Reid was instrumental in the creation of U.S. Silver in 2006 and facilitated access to financing for the Company. He has served the Company with distinction and dedication over the past two years providing the leadership necessary for the Galena Mine to achieve a significant turnaround.
Mr. Reid commented, “U.S. Silver is extremely fortunate to have procured the services of someone with Tom’s proven background and experience. With current market conditions, it is time for someone with a strong operating background to guide the Company towards its objective of returning the Galena mine to full profitability in a difficult commodity market.” Bobby Cooper, Chairman of the Board (an Electrical Engineer with a Business Degree, not a Mining Engineer as mistakenly reported), added “Mr. Parker’s hands-on experience will serve the Company well in these tough times.”
Mr. Parker is a Mining Engineer with over 40 years of direct involvement in the mining industry. He has extensive experience with both public and private companies. Most recently, Mr. Parker served as President and CEO of Gold Crest Mines Inc. He was CEO of High Plains Uranium Inc. from 2006 until that company was acquired in early 2007. Prior to that, Mr. Parker was Vice President of Anderson and Schwab, a New York based management consultancy specializing in the mining sector. He also worked at Costain Coal Inc. where he was President and CEO in the early 1990s.
Strategic Review and Workforce Reduction
The Company has undertaken a strategic examination of its Silver Valley Operations in Northern Idaho as a result of the change in commodity demand and prices as well as the resulting challenging outlook for equity markets. Consequently, there has been a cessation of all capital projects with the exception of the rehabilitation of the Galena Shaft, where work is now being done at approximately 25% of the previous monthly cost. Nearly 700 feet of shaft have been repaired and only 150 feet remain to be rehabilitated. The completion is now expected during the second quarter of 2009, which should lead to greater operating efficiencies and lower mining costs.
The Company has released four contractor groups that were working at the Galena Mine. The Company has also downsized the number of hourly workers by approximately 30 employees and the number of office staff by approximately 15 employees. The reduction in force was not performance based, but as a result of a restructuring of the Galena operation to match costs with expected revenues.
US Silver is also consolidating milling at the continuously operated Galena Mill. The rehabilitated Coeur Mill will remain in production until the number 3 circuit of the Galena Mill begins production this week. At that time, all milling will occur at the Galena Mill, resulting in more efficient operations, a cessation of the trucking of newly mined ore and lower operating costs. To further increase milling efficiency and improve gross margins, the Company will operate the Galena Mill at full capacity by also milling supplementary, already stockpiled, low-grade ore.
The entire Company is now concentrating on making the operations cost effective in order to generate positive gross margins, especially with respect to improving tonnage, ore grade and mill efficiency. As a result, certain levels of the mine will be closed and those levels that will provide the greatest positive gross margins at current metals prices will be mined first. A renewed focus will be placed on the effectiveness of the supervisors and miners to ensure that the right tools and processes are utilized. Other initiatives include the cessation of exploration drilling while existing backlogs of drill core are analyzed; the utilization of better financial tools for enhanced mine analysis; and the development of ore bodies with long-term production potential.
ABOUT U.S. SILVER CORPORATION
U.S. Silver, through its wholly owned subsidiaries, owns and operates the Galena, Coeur, and Caladay silver-lead-copper mines in Shoshone County, Idaho, with the Galena mine being the second most prolific silver producer in U.S. history. Total silver production from U.S. Silver’s mining complex has exceeded 210 million ounces of silver production since 1953. U.S. Silver controls a land package now totaling approximately 18,000 acres in the heart of the Coeur d’Alene Mining District.
The Company is currently debt free and has roughly $8 million in working capital.