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PRODUCTION AND MINERAL SHIPMENTS
The Royal Mines of Zacualpan Silver Project was purchased by IMPACT on January 16, 2006. IMPACT's first full day of production was January 18, 2006. The first mineral shipments (one silver-lead concentrate, one zinc concentrate and one shipment of high grade silver direct shipping ore) were made on January 31, 2006. Through to the end of February a total of 12 mineral shipments have been made (four silver-lead concentrate, four zinc concentrate and four shipments of high grade silver direct shipping ore). Final grades and contained metal for these shipments will be known once the final returns from the smelter are received. Management is pleased both with the smooth manner in which the transition of ownership occurred as well as the performance of IMPACT's new on-site management team in quickly accessing and beginning production of the high grade silver direct shipping ore.
The Royal Mines of Zacualpan Silver Project includes two operating silver mines, a 500 tonne per day operating plant and associated mineral concessions covering 124.5 km2 of the Zacualpan Silver District. Production is presently from the Guadalupe Mine in the center of the district and the high grade San Ramon (Compadres) Mine in the southeastern part of the district. In the future IMPACT will refer to the high grade mine by its historic name, San Ramon, rather than Compadres to avoid confusion with another area known as Compadres in the district.
EQUIPMENT AGREEMENTS
The first of the two new contracts is an exclusive option agreement that allows IMPACT to purchase the 500 tonne per day processing plant plus certain mineral concessions and surface rights for US$1,140,000 and 100,000 shares at any time before December 2, 2006. An initial option payment of US$2,000 was made just after the signing of the agreement. The agreement is subject to TSX Venture Exchange approval. Once approval is received, monthly option payments of US$4,000 per month will be due to the vendor. Presently IMPACT leases the plant and surface rights to process its mineral production. The producing Guadalupe Mine is located on these leased mineral concessions and is subject to a 2.5% Net Smelter Return royalty. These lease and royalty payments will end upon exercise of this agreement. (The high grade San Ramon (Compadres) Mine is located on mineral concessions owned 100% by IMPACT and is not subject to any royalties.)
The second contract is a lease with an exclusive option to purchase agreement for various mining production equipment. Under this agreement IMPACT presently leases the equipment for US$25,000 per month and has an option to purchase the equipment at any time before July 16, 2006 for US$500,000. Half of each lease payment is applicable toward the purchase price.
It is IMPACT's intention to complete the purchases of both the processing plant and mining equipment shortly. With these purchases IMPACT will own all the equipment and surface rights related to its Royal Mines of Zacualpan operations and will have a 100% interest with no underlying royalties to 124.5 km2 of mineral concessions comprising most of the silver district.
IMPACT's future plans call for continuing production while simultaneously expanding and upgrading operations to modern standards. A major portion of the recently announced financing will be directed toward these purchases and upgrades as well as an extensive exploration program. Exploration work is presently focused on preparing targets for a drill program in the near future. The balance of the funds will be used for working capital purposes including the possible monetization of base metal hedges under the existing smelter contract.
IMPACT Silver Corp. is a silver focused mining and exploration company with projects in Mexico and the Dominican Republic. Energold Drilling Corp. (EGD:TSX.V) holds 6.6 million shares of IMPACT.
On behalf of the Directors of IMPACT Silver Corp.
"Frederick W. Davidson"
President
For further information please contact:
Darrell Rader, Corporate Development
The TSX Venture Exchange has neither approved nor disapproved this news release.
