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|  | |    | |  Location The Prognoz silver project is one of the largest and highest grade undeveloped primary silver projects in the world. It is located in the Republic of Sakha (Yakutia) of the Russian Federation, approximately 444 kilometres north of the capital city of Yakutsk, at a latitude and longitude of approximately 65° N and 133° W. The property is in an area of gently rolling terrain with elevations ranging from 300 metres to 1100 metres above sea level. The property is 56 square kilometres in area as shown in the property map below: The Prognoz Property
 Click on image to enlarge Geology and Mineralization Mineralization is epithermal in origin. Regionally, the property is located within the Verkhoyansk mobile belt, a major fold-and-thrust belt that forms part of one of the earth's great orogenic systems. The district where the Prognoz deposit is located covers the areas of junction of the Sartang sinclinorium at the west with the Adychan fold-and-block dome to the east. The boundaries of the majority of the mineralized deposits on the property are determined by the intersection of longitudinal and lateral faults. More than 30 veins have been identified on the Prognoz property. Many of these vein sets are multi-kilometre in length, and on average 2- 4 metres wide and 200+ metres deep. The veins appear to be moderately to steeply dipping. Mineralization occurs as quartz-carbonate-sulphide-sulphosalt cement within fault breccia, veins and stringers. Host rocks are largely sandstone and mudstone. 
Exploration Work at Prognoz Extensive drilling and trenching has been conducted on the Prognoz property. During 2006 and 2007, High River's 85%-owned Russian subsidiary, OJSC Buryatzoloto ("Buryatzoloto"), drilled over 650 core holes (over 59,500 metres), completed 4 adits for a total of 187 metres and extracted a 17 tonne bulk sample for metallurgical testwork. Historical work consisted of 89 diamond drill holes (17,805 metres) and 317 trenches (17,756 metres). "Updated" NI 43-101 Resource Estimate In June 2008, High River issued a press release outlining the latest NI 43-101 compliant resource estimate on the property, calculated by MICON International Limited ("MICON"), as follows:
The "Updated" NI 43-101 resource estimate incorporates assay results from drilling only up to December 31, 2007, including historical exploration results, and from drilling on two of the more than 30 veins identified on the property. In total, assay results from 331 diamond drill holes (53,022 metres) and 242 trenches (12,745 metres) are included in the "Updated" Resource estimate. A breakdown of the drilling incorporated in the "Updated" resource estimate is as follows: Diamond Drilling (Glavnoye and Boloto Veins)
The Qualified Persons responsible for the calculation of this NI 43-101 compliant Resource Estimate are William J. Lewis, B.Sc., P. Geo. (APEGB # 20333, APEGM #20480, NAPEGG #1450, APGO #1522), a senior geologist with MICON based in Toronto, Canada, and Dibya Kanti Mukhopadhyay (MAusIMM), a senior mineral resource geologist with MICON based in Norwich, England. MICON stated that the resource estimate is not materially affected by any known mining, metallurgical, infrastructure, environmental, permitting, legal, title, tax, socio-economic, marketing, political or other relevant factors. Further Notes to the "Updated" NI 43-101 Resource Estimate:
"Updated" Estimate of Conceptual "Additional" Mineral Potential In addition to the Glavnoye and Boloto veins, more than 30 silver veins in total have been identified on the Prognoz property. As such, High River and MICON believe the potential to increase silver resources at Prognoz is substantial. MICON has provided an "Updated" estimate of the conceptual additional mineral potential which is based on approximately 80 diamond drill holes and approximately 100 trenches on 16 other veins. This potential is not included in the Resource Estimate.
Since the conceptual additional mineral potential of a property cannot be estimated to the same accuracy as a mineral resource it must be stated as a range. To calculate the range, MICON applied a factor of minus 30% for the down side and plus 60% for the upside potential. The upside potential factor is larger than the downside potential factor because of the possibility that the mineralized zones included in the potential resources will be similar in nature to, and as extensive as, the Glavnoye and Boloto zones. MICON also indicated that contributing to the upside potential is the possibility that additional veins related to existing veins could be discovered (off-splays and anastomosing vein branches). It should be noted that the additional mineral potential of the Prognoz property is conceptual in nature and that there has been insufficient exploration conducted on the 16 veins to define a mineral resource. It is also uncertain if further exploration will result in the targets being delineated as mineral resources. The 16 veins included in the conceptual additional mineral potential evaluation are as follows: Dal'naya (D), Dal'naya-1,2 (D1), Krutaya (K1), Guk (G), Solnechnaya (S1), Osenn'aya (O1), Yuzhnaya-1 (Y1), Yuzhnaya-2 (Y2), Yuzhnaya-3 (Y3), Yuzhnaya-4 (Y4), Tikhaya (T1), Vesenn'aya-1 (V1), Vesenn'aya-2 (V2), Vesenn'aya-3 (V3), Udachnaya (U), and Boloto-2 (B2). The depth of conceptual mineral potential evaluation, for those zones which have been explored, ranges between 40 metres and 100 metres below the deepest samples collected from either trenches or drill holes, to a maximum vertical depth of either 100 metres below the sample point or 200 metres below the surface, whichever is reached first. This maximum depth was used as it corresponds approximately to 1/3 of the depth of the known mineralization of the Glavnoye deposit. The exception is the eastern flank of the Boloto 2 zone where the maximum depth is set at 230 metres based on the actual depth of the mineralization in the eastern portion of the Boloto deposit. Because the current world-class size and grade resource estimate at Prognoz is based on only two of more than 30 veins existing on the property, MICON believes that that there is significant potential for resource growth from further exploration and that therefore, the current estimate of the conceptual additional mineral potential for Prognoz is conservative. Plan view of the central portion of the Glavnoye Vein  click to enlarge Longitudinal Section of the central portion of the Glavnoye vein  click to enlarge A Representative Cross Section of the Glavnoye vein  click to enlarge In 2007, four declines, each averaging 46 metres in length and totaling 184 metres, were driven to extract bulk samples for metallurgical testing. Seventeen tonnes of sample material, estimated to average 715 g/t silver, 2.6% lead, and 0.6% zinc, was collected and divided into 2 samples. One 5-tonne sample was sent to the IRGIREDMET laboratory in Irkutsk, and a 12-tonne sample was sent to the Scientific Research Institute of Base Metal Metallurgy in Ust-Kamenogorsk in Kazakhstan. The metallurgical testing will determine preliminary flow sheet parameters and silver and base metal content. In 1988 the state mining-geological company, Yangeologia, collected a 358-kilogram sample composed of channel samples from trenches on the Glavnoye deposit. The metallurgical test work was carried out at the Scientific Research Institute in the City of Magadan. The Research Institute tests included crushing and grinding the sample, and silver recovery by gravity separation, flotation and cyanide leaching. According to historical metallurgical testwork, gravity and flotation recovered 92.3% of the silver, 89.2% of the lead and 73.0% of the zinc. Recovery of silver was increased by an additional 5.7% through cyanidation of the flotation concentrate. | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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