General Minerals extends Atocha mineralization (February 25, 2002)

Recent surface channel sampling by General Minerals (GNM-T) along strike from the A10 test mine site at the high grade Atocha silver project located in central Bolivia, has extended mineralization over a strike length of about 10 km.

The channel sampling targeted high-grade silver mineralization hosted by a sandstone unit. Continuous channel samples of the weathered and leached sandstone unit were taken across the unit at about 1.5-km intervals, depending on rock exposure. The mineralization was previously identified by underground drilling and test mining.

Three channels were cut about 2.7 km north of the test mine site and returned between 17.5 and 20.8 grams silver per tonne over widths between 2.4 and 6.1 metres.

Some 1.9 km south of the test site, four channels yielded between 17.9 and 54.6 grams silver, with widths ranging from 1 to 2.3 metres.

Another two trenches situated 4.6 km south of the test site surrendered 10.2 grams silver over 1.1 metres and 25.6 grams sliver over 3.4 metres.

Finally a single channel situated another 2.4 km to the south cut 18.2 grams silver over 6.1 metres.

The company says the longer intervals (6.1 m) are encouraging in that they are substantially greater than the average 2.3-metre width test mined at A10, and the thicknesses occur at surface.

Previous sampling at the test mine and 1.4 km north at Condor Iquina, indicated that low grade surface leached material may represent much higher grades at a depth of a few metres. Sampling in tunnels at Condor Iquina yielded up to 1,800 grams silver over 1.5 metres. Previous channel sampling at the test mine site returned grades between 20 and 15,448 grams silver. Typically silver values were around 500 grams silver over 1.5 to 2.5 metres.

The sampling program indicates that mineralization can be found at surface, where exposed, over a strike length of nearly 10 kilometres, thus greatly increasing the area in which silver resources can be sought. The modest resource reported previously (see GMC PR00-14) at the test mine site was developed by underground drilling and tunneling over only 320 metres of strike and similar depth extent.

In 2000, the company completed an internal, positive feasibility study at Atocha. The study was based on a selective mining operation running at a rate of 400 tonnes per day at an average grade of 600 grams silver.

Annual production from a mine and mill facility was pegged at 1.1 million oz. of silver, later ramped up to 2.2 million oz. per year., as additional reserves and resources are drilled out. Total capital cost, including construction, working capital and a contingency, were pinned at US$4.8 million and operating costs at US$2.50 per oz.

At a US$5 per oz. silver price, and a 3.5-year life the project’s annual cash flow was estimated at US$5.1 million. The internal rate of return was pegged at 81% with a payback period of one year.

In the boardroom, Tina Woodside, outside legal counsel for the Company since 1994, will replace the recently resigned David Wahl, a board member since 1998.