Impact building third Mexican mine

Vancouver – Ground breaking at its planned Chivo mine has junior silver producer Impact Silver (IPT-V, ISVLF-O) on track to grow operations at its Royal Mines of Zacualpan mining complex located about 100 km southwest of Mexico City.

Chivo will be the third silver producing operation on the mining complex and the second built by Impact.

Underground development will likely reach the main Chivo silver shoot by November and then multiple development workings will be excavated into the mineralization.

The mine is expected to contribute production of 60 tonnes per day by early 2008.

The company first discovered high-grade silver veins at Chivo in 2005 while exploring old mine workings. Vein samples ran upwards of 2,000 grams silver per tonne. Follow-up drilling of 18 holes returned intercepts of up to 937 grams silver over 2.7 metres of true width in hole Z-06-10.

Impact’s drilling delineated a silver mineralized shoot of 100 metres horizontal length by 220 metres downdip extension and remaining open to the northeast and southwest. Additionally, a second possible shoot was identified in the drill program.

The company also reports its two operating mines, Guadalupe and Gallega, have increased total production to the 300-tonne-per-day level. The production boost now more than doubles the throughput rate when Impact purchased Royal Mines of Zacualpan in early 2006. A production goal of 500 tonnes per day has been tabled for late 2008.

Mining in the Royal Mines of Zacualpan silver district dates back to the early 1500s. From 1975-2004 about 17 million oz. of silver production is recorded.

Silver mineralization in the camp is hosted in epithermal vein structures. Veins can typically run from 3-5 metres in width and are generally steeply dipping. Upper levels of the veins are usually silver-rich (upwards of 1,000 grams silver) while lower levels tend to become enriched in base metals.

Impact lodged production of about 190,000 oz. silver, along with some modest lead and zinc credits, for the first six months of 2007 from almost 30,000 tonnes of ore processed.

The company acquired the Royal Mines of Zacualpan complex for US$1.84 million plus 300,000 shares.

Shares of Impact Silver recently rallied about 15% to trade at the $1.65-level. Based on its 43.1-million shares outstanding, the company posts a $71-million market capitalization. The stock has a 52-week trading range of 90-$2.11. Energold Drilling (EGD-V, EGDFF-O), a sister company with common management, holds about 15% of Impact Silver.