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With silver, lead and
zinc properties in Canada and Mexico, Chairman and President, Richard W. Hughes expects
Klondike Silver to be a market leader in their stable of companies
Klondike Silver Corp.
711-675 West Hastings Street
Vancouver, BC Canada V6B 1N2
Richard W. Hughes
Chairman and President
Interview conducted by:
Lynn Fosse, Senior Editor
Published May 25, 2007
Richard W. Hughes - Board Chairman, President
Mr. Richard Hughes, President of Klondike Gold Corp., is widely recognized as one of the
original people behind the discovery of the Hemlo gold mines in Ontario and was also
behind the discovery of the Balmoral Mine in Quebec. Mr. Hughes controls Hastings
Management Corp., and is the president of six companies currently listed on the Toronto
Venture Stock Exchange. He was also instrumental in discovering and putting into
production the Sleeping Giant Mine (owned 50% by Aurizon Mines and 50% by Cambior), and
also the Beaufor Mine (owned by Aurizon Mines). Mr. Hughes' proven track record and
extensive experience in the management of public mineral exploration companies enables
Klondike Silver to pursue potential world class projects.
KLONDIKE SILVER CORP. is aggressively exploring for and developing silver and associated
lead/zinc deposits in the famous Slocan silver camp in southern British Columbia. The
Company is the principal owner and operator in much of the Slocan silver camp and wholly
owns the operational 100 TPD Sandon concentrator mill.
Klondike Silver believes the Slocan silver camp to have excellent potential of hosting new
polymetallic silver-lead-zinc deposits and by using modern geophysical, geochemical and
drilling exploration techniques can successfully find rich, near surface vein extensions
and new ore bodies.
CEOCFO: Mr. Hughes, Klondike is an
aggressive company; what are you looking for and where are you finding it?
Mr. Hughes: Klondike Silver is a
company based in British Columbia Canada. It has about 48 million shares issued, fully
diluted it would probably be about 75 million shares. The companys main asset is in
the famous Slocan silver camp in Sandon in southern British Columbia, which is about 70
miles northwest of Nelson, BC. It is an old mining camp; there were over a hundred mines
in operation on this property. It has taken us eight years to accumulate a huge land
position up there. For most of the mines were operating, they were abandoned in the 1930s,
because of low metal prices in ore.
We have a hundred ton a day mill in the Slocan silver camp in southern B.C., which we own
completely. We have re-ramped it completely, so it is ready for production and we expect
to be in production for silver, lead, zinc and emphasis on silver, by mid this year (2007)
in July or August at the latest. We have a crew up there of about twenty people. It is a
base for the company and it is going to have production and revenue. The average mineral
content rate up there on a lot of these projects is about 15 ounces per tonne and another
15% combined led, zinc. It is a very profitable operation. We have three major silver
targets up on the Yukon in Canada, two of those are ready for drilling, the other one is
ready for sampling and it seems to average about thirty to sixty ounces of silver plus
another thirty percent lead, zinc. We will bulk sample this summer and it will go into
production a year this summer. We also have about 80% of the big silver camp in
northwestern Ontario, Elk Lake and Gowganda area and that is in Klondike Silver. We have a
huge land position. We are just starting our trench and geo chemical work in geophysics
and expect to find new ore zones there.
In a place in Mexico, the Sierra Madre mountains, this is the north part of Mexico, some
of the big mines like Deloras and the Alamos Gold Inc (TSX: AGI) Gold Project, which we
started at .20 cents it is now trading at around $6.50 and it is in production doing over
a hundred thousand ounces of gold a year, of open pit gold. We now have staked several
properties in Mexico, which look somewhat like the geological project in Alamos. Also I
have optioned the Santa Lucia, it is an old silver/gold mine. We got a huge land position
there and there has been about $12 million spent by other people so far. It is a great
project and we are going to bring that forward. Klondike Silver is going to be a pure
silver company; there will be some residual led/zinc with it and gold. We are on the
lookout for more good silver properties and reviewing those all the time. We expect
Klondike Silver from the trading range of about .35 cents to be one of our market leaders
in our stable of companies.
Are you looking at areas outside of Canada and Mexico?
Mr. Hughes: No, we are not happy with
Russia; we think there is a lot of graft over there and political upheaval. We see the
same in a lot of places in South and Central America. Nigeria, they change the gold posts
on you and the regulations like Peru has done recently. We focus on having 98 percent of
our product in Canada. We would like to find more mines for Canada and develop projects in
Canada and keep our staff in Canada. It is much safer here, a great place to work, a great
mining environment, no problem getting permits and putting things into production. There
is not graft here, and everything is on the table and if you find a good mine here it will
reflect the share price.
Are there challenges ahead for Klondike, or do you see smooth sailing?
Mr. Hughes: The stock came out trading
about a year ago at .20 cents, it went up to about .70 cents, it has pulled back about .35
cents because of lack of news and that is just now starting to come out with our drill
programs and going into production. Chartwise, it would look good because it is 50%
pullback from the top of its trading pattern. There are not too many shares outstanding. I
do not see any pitfalls for the company; I see a lot of blue skies ahead for us.
In closing, why should potential investors be interested in silver and why Klondike?
Mr. Hughes: A lot of silver companies
trade at five, ten, twenty, thirty dollars and Klondike Silver is a new company just
starting to grow and we have product in there that is absolutely fantastic. We know how to
get the product out of the ground, we know how to work these properties and bring them
forward. It is not high-risk, because it is going into production and the price is right
at just over .30 cents, which is a very sound buy for people. It is a junior mining stock,
and they can be risky at times, but we are in the right part of the world with the right
projects and we think there is good upside on the share positions.
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