War Eagle is encouraged by drilling at La Blanca

Recent drilling on the La Blanca property in the state of Chihuahua in Mexico has owner War Eagle Mining (VSE) optimistic ongoing work will prove up a large silver-gold deposit.

Based on eight drill holes on the newly discovered River zone, the company estimates preliminary reserves at more than six million tons grading about 4.76 oz. silver and 0.013 oz. gold per ton.

The River zone remains open in three directions, with the recent drilling covering a strike extent of about 660 ft., a width of more than 300 ft. and a down-dip extent of about 300 ft. The zone strikes east-west and dips steeply to the north.

War Eagle notes that the mineralization in the River zone is associated with a large stockwork system, and believes there is potential to increase tonnage. The company plans to start a 10,000-ft. drilling program this month. The program will include stepout and infill drilling on the River zone as well as deeper drilling to test a parallel structure below the River zone. Stepout drilling to the north is also planned to test for other parallel structures.

Preliminary bench-scale testing indicates that recoveries of 87% for both silver and gold can be achieved by conventional flotation.

Speculation and promotion over test-pitting on the La Blanca property late last year tripled the price of the company’s shares to a high of $3.50. Sampling results from the pits returned grades averaging 9.67 oz. silver and 0.048 oz. gold, with the issue subsequently falling back to the $1 level by year-end.

The company is well funded for this year’s drill program after recently completing a 300,000-unit private placement at $1.20. The placement includes 300,000 warrants to purchase additional shares at $1.40 for 12 months. The company has about 8.4 million shares outstanding, or 9.1 million on a fully diluted basis.

Selected drilling results from the River zone are as follows: Hole Interval(ft.) Width(ft.) Silver(oz./ton) Gold(oz./ton)

11 130-285 155 5.94 0.017

12 105-335 230 7.24 0.022

520-560 40 5.48 0.020

17 60-490 430 4.07 0.009

18 20-155 135 3.21 0.008

19 60-405 345 3.21 0.007

20 90-440 350 5.71 0.022

21 15-40 25 2.39 0.006

75-345 270 4.54 0.013

375-405 30 6.28 0.021

22 60-175 115 3.99 0.010

220-280 60 3.51 0.010

420-440 20 3.44 0.012