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TSX-V Trading Symbol: SNS
VANCOUVER, May 25 /CNW/ - SNS Silver Corp. ("SNS" or the "Company") (TSX-V: SNS) reports that on May 15, 2007, Crescent Inc. ("Crescent"), a wholly owned subsidiary of SNS, was served with a third party complaint in relation to ongoing litigation between the United States Environmental Protection Agency (the "EPA") and the owners of the Bunker Hill Mine. The Bunker Hill Mine is located adjacent to the Company's Crescent Mine in the Coeur d'Alene mining district in Idaho.
Mr. Neil Linder, President and CEO of SNS, is quoted as saying, "We feel that this complaint is with little merit, and any preliminary projected settlement regarding this litigation will largely be immaterial. Furthermore, we have an excellent working relationship with the EPA and have been discussing settlement of this matter with our attorneys and the EPA for the past two months to come to a mutually satisfactory conclusion which should be resolved shortly. We also feel that this matter would have been resolved in the normal course of business and in no way is there any material effect on our future plans or opportunities. Under the Superfund law, a person or company who settles with the EPA is protected from contribution claims such as this complaint."
Details of the Complaint
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The Bunker Hill mine is owned by "Placer Mining Corp", a U.S. company controlled by Bob Hopper, doing business as "The New Bunker Hill Mining Company". The litigation, US v. Placer Mining Corp. and Hopper, which is currently pending before Judge Edward Lodge in United States District Court for the District of Idaho, was brought by the EPA in 2004 to recover past and future remediation costs under the federal Superfund law. A portion of the costs the EPA seeks to recover from Placer Mining Corp. and Hopper (collectively, the "Defendant") are for the treatment of mine water from the Bunker Hill mine. Pursuant to the terms of a 1994 EPA order, the Defendant pumps water from the mine pool to maintain the pool at a specified level. The pumped water, and other water collected from the Bunker Hill's upper workings, is piped to a water treatment plant owned and operated by the EPA. In its 2004 complaint against the Defendant, the EPA alleged that it spends between US$400,000 and US$500,000 a year to treat the Bunker Hill's mine water.
The third party complaint against Crescent was brought by the Defendant and alleges that the Crescent Mine is connected to the Bunker Hill Mine by a deep tunnel known as the Yreka cross cut and that the Crescent Mine contributes water to the Bunker Hill mine pool through the cross cut. The complaint further alleges that Crescent is equitably responsible under the Superfund law for a portion of the EPA's water treatment costs based on the alleged contribution of water through the cross cut. In documents previously filed in the litigation, the EPA alleges that the Bunker Hill Mine produces an average of 1500 gallons of mine water per minute, and estimates that the Crescent Mine contributes approximately 3% of that flow. These estimates are based on an expert's report prepared by CH2M Hill for the EPA. Although the EPA lawsuit seeks other costs from the Defendant unrelated to the water treatment costs, the third part complaint against Crescent seeks contribution only for the water treatment costs.
Crescent Inc. has until June 4, 2007 to file an answer with the Court to the third party complaint. SNS has been pursuing a settlement of the matter with the EPA, and has already held productive settlement discussions with the agency and the US Department of Justice. Under the Superfund law, a person who settles with the EPA is protected from contribution claims such as the one brought by the Defendant. Based on the EPA's estimates with respect to water flow and the costs of treating the mine water, the Company believes that a settlement with the EPA will not exceed US$200,000. A settlement with the EPA will relate to payment by the Company for its portion of the water treatment from the mine for the next 30 years based on the net present value of such costs.
The Company is currently preparing its answer to the Court and will continue to work with the EPA to reach a settlement to this matter as quickly as possible. The Company anticipated that they would have come to an arrangement for treatment of the Crescent's mine water as part of its normal course of business. Most mines in the US, and all the active mines in the Coeur d'Alene mining district, must arrange for some form of treatment of mine water in order to comply with state and federal water quality laws. The Company and its attorneys believe that the third party complaint by the Defendant was a specific tactic by the Defendant to delay the trial of the matter brought by the EPA against the Defendant.
SNS Silver Corp. owns 100% of the Crescent Mine in the Coeur d'Alene mining district. The Crescent Mine is a historic high-grade silver producer. From 1917-1982 the property produced 25 million ounces of silver at an average grade of 27.3 ounces per ton. Prior to its last shut down in the 80's, previous operators of the Crescent Mine reported over 9 million ounces of silver resources at an average grade of 18 ounces per ton. The property lies between two world-class silver producers: the Sunshine mine which has produced more than 300 million ounces of silver and the Bunker Hill mine, which has produced over 150 million ounces of silver. The Coeur d'Alene district is the only known mining district in North America to have produced over 1 billion ounces of silver. SNS Silver (SNS) trades on the TSX-V under the symbol SNS. The Company has approximately 28.9 million shares outstanding and approximately $9.0 million cash on hand.
All resource estimates quoted herein are based on data and reports obtained and prepared by previous operators. The Company has not completed the work necessary to independently verify the classification of the mineral resource estimates and is not treating the mineral resource estimates as National Instrument 43-101 defined resources verified by a qualified person. The historical estimates should not be relied upon. The Crescent Mine will require considerable further evaluation, which the Company's management and consultants are in the process of completing.
The TSX Venture Exchange has not reviewed and does not accept the
responsibility for the adequacy or accuracy of this news release.
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