Silverstone up on Lundin’s strong numbers

Silverstone Resources (SST-T) made a move up the market on robust figures from Lundin Minings (LUN-T, LUMI-O, LMC-X) Portuguese base metal mines.

The reason for the connection between Lundins resources and Silverstones stock price, is Silverstones ownership of all silver production from Lundins Neves-Corvo and Aljustrel mines.

Tied to the purchase of those silver rights was the completion of its own National Instrument 43-101 compliant technical reports on the projects.

And those new reports give Neves-Corvo a proven and probable reserve of 39.8 million oz. of silver and measured and indicated resource of 89.4 million oz.

Aljustrel has proven and probable reserve of 29.7 million oz. of silver and a measured and indicated resource of 50 million oz.

Those numbers were sufficient to send the Vancouver-based company up 16% or 28 to $2.07 on roughly 325,000 shares traded.

Back in June Silverstone announced it was buying the rights to all of the life of mine silver production from the two mines. It says it expects proceeds from the silver sales to start around the end of September.

The purchase pushed the companys total expected silver sales to over 1 million oz. for 2007 and 3 million oz. by late 2009.

While close to one another Neves-Corvo and Aljustrel operate independently of each other, with Neves-Corvo turning out roughly 500,000 oz. of silver annually. That silver is contained in copper concentrate.

Aljustrel is scheduled to be commissioned by the end of the month, with roughly 1.2 million oz. of silver being turned out in lead concentrate when full production is reached in 2009.

Silverstone paid Lundin US$42.5 million in cash and gave it 15.4 million common shares and 4.3 million special warrants which are convertible into common shares at no additional consideration.

Silverstone will also have to make on-going per ounce payments of US$3.90 or the prevailing market prices — depending on which is less.