Texas Exploration - Silver Spur

Between 1891 and 1925 some 2 million ounces of silver were produced at Silver Spur from 90,000 - 100,000 tonnes of ore. Average grades up to 1909 were recorded at Cu 1%, Pb 13%, Zn 25% Ag 809 g/t, Au 1.5 g/t. at that time the zinc was not recoverable. The mineralisation at Silver Spur is massive sulphide.

Approximately 90,000 t of slag remains on the surface of the lease and grades an average of 0.5 g/t Au, 0.35% Cu, 3.17% Pb, 15.8% Zn, 158 g/t Ag, (calculated in 1998 by Rimfire Pacific Mining NL).

Twin Hills Silver Mine Construction

The progress of construction undertaken around the Twin Hills mine site is highlighted in a series of photos which form part of this update.

Unseasonal wet conditions in late June and throughout July have delayed the final shaping of the leach ponds and pad area until this week. Ground conditions for the laying and welding of the High Density Polyethylene (HDPE) liner have to be very dry to ensure quality welding and the integrity of the seams. The HPDE liner has been delivered to site and will be laid once a contractor ‘crew' is available.

The requirement for crushed and screened ‘products' to be used during the construction activity has resulted in the commissioning of the Extec crushing and screening plant units. Waste rock and alluvium source materials, located within the Twin Hills Mining Lease, have been utilised for this purpose. As an example, one of these products is being used as the underlay protection layer for the HDPE liner on the leach pads and in the process ponds.

Test work on the thirty (30) tonne silver ore sample extracted from a small surface slot near the top of the Twin Hills ore deposit is ongoing. Whilst a quantity of silver powder has been obtained, tests are in progress to optimise the leaching, stripping and purity of the silver powder.

A programme of ‘grade control' drilling is currently being undertaken over the central part of the Twin Hills ore body. The aim of this drilling is to delineate the initial 200,000 tonnes of ore to be extracted from the deposit. Once this ore is mined, crushed and agglomerated, it will be stacked in 50,000 tonne cells on the heap leach pad where it will undergo leaching. These ‘pregnant' solutions from the heaps will be pumped through the electrowinning circuit as part of the commissioning phase to optimise the production of the silver powder product.

Delays encountered during the construction phase, including wet weather and longer than anticipated lead times in sourcing all the components for the crushing (ex UK) and stacking circuits have meant that the construction phase has been extended. We had initially hoped to finish construction by October, but now believe that construction will be completed prior to the end of 2005.

The rise in the silver price over the last six months has not advanced as strongly as we might have anticipated, but is rising nonetheless. It has always been the intention of the Company to commence silver production once a strong up-trending silver price is in place; as the management is committed to maximising shareholder value from the development of the present reserves. The delays incurred to-date are not expected to adversely impact on the project.

Our present schedule is to complete construction towards the end of 2005, commission the plant in early 2006 with full production (subject to silver price) soon thereafter.

By D.M. O'Neill, MANAGING DIRECTOR

Website: http://www.macmin.com.au/