The Trio deposit has an inferred resource of 1.02 million metric tons averaging 1 percent copper, 1.11 g/t gold, 16.56 g/t silver and 1.56 percent zinc.

A US$50 net smelter return cut-off was used to calculate the resource.

“A sizable increase in the volume of defined resources is always welcome. What’s most significant about these results however is the impetus they provide to the timely completion of a technically and financially robust PEA for the Niblack Project, which we currently expect to deliver early in 2012,” said Heatherdale President and CEO Patrick Smith.

The new mineral resource estimate is based on drilling completed to Nov. 4 and includes a database of 373 drill holes. Mineralization has been modeled as sub-seafloor replacement and accumulation-style VMS deposits. The new estimate utilizes three-dimensional geo-statistical modeling techniques and estimation parameters based on careful study of the geologic setting at Niblack.

The 33 percent increase of indicated resources within Lookout occurred along the eastern down-dip extension. Current outlined dimensions of the Lookout Deposit are approximately 670 meters by 520 meters, with an average thickness of around 20 meters.

The previous resource estimate for the Niblack project, released in March, delineated a higher-grade core that Heatherdale considers to be an ideal starter zone for a mine. Using a US$150 NSR cut-off this core zone contains 1.46 million metric tons averaging 1.73 percent copper, 3.5 g/t gold, 61.6 g/t silver and 3.84 percent zinc.

Heatherdale said this area in the central portion of the deposit was confirmed by delineation drilling.

The company said the 29 percent expansion of inferred resource tonnage at Trio further demonstrates the potential for resource expansion at Niblack. Current outlined dimensions of the Trio deposit are approximately 335 meters by 105 meters, with an average thickness of some 65 meters.

“We now have a more refined understanding of the geometry and grade of the deposits at Niblack, an understanding that will significantly enhance the accuracy and longevity of the mine model currently being developed within the Niblack Project Preliminary Economic Assessment (PEA) study,” Smith said.

In addition to defined tons and grade, Smith noted that the geometry and continuity of the Lookout and Trio deposits – in particular their thicknesses – make them attractive candidates for low-cost underground mining.

“The project continues to become more robust with each phase of work,” he said. “We still have many exciting target zones to drill-test in order to develop additional resources and further expand areas of high-grade mineralization.”

In addition to Lookout and Trio, Heatherdale notes four additional known VMS deposits at Niblack –Mammoth, Dama, Lindsy and the historical Niblack Mine.

In addition to exploration Heatherdale has been meeting with community and political leaders, Alaska Native tribes and corporate entities, and other prospective business partners in the state.

“Our efforts to expand known deposits of high-grade VMS mineralization at Niblack and prepare the project for development and permitting continue to receive widespread support and encouragement from the people, communities and institutions of Southeast Alaska,” Smith said. “Southeast Alaskans want and encourage responsible development of their mineral resources, and are willing to work cooperatively with progressive companies that invest in programs that generate benefits for local communities while ensuring protection of valued natural resources. It is a very encouraging and supportive environment for Heatherdale and the Niblack Project.”

Heatherdale said it is pursuing partnership opportunities with a range of Southeast Alaska institutions, corporate entities and Native organizations to supply power to a proposed mine at Niblack. As a member of the Southeast Conference, the Heatherdale has worked with a range of local government and private entities to ensure that its future energy requirements are reflected in the Southeast Integrated Resource Plan. Heatherdale has also engaged with the Alaska Energy Authority and the Alaska Industrial Development and Export Authority, which regularly provides financing to public-private partnerships to facilitate infrastructure development and economic growth in the state.

In addition to power alternatives, Heatherdale is investigating locations for ore processing facilities, including the option of barging ore from Niblack to a suitable offsite location. Several regional institutions and public entities in Southeast Alaska are actively working with Heatherdale as it seeks to identify candidate sites with suitable topography, and access to hydroelectric power, tidewater, and a commuter workforce.

“While it’s early days, we believe Niblack will require the provision of some 3.5 megawatts of power to operate a 1,500- to 2,000-ton-per-day underground mine, and another 8 megawatts to operate a mill and processing plant,” Smith said. “The final identification, permitting, development and realization of these facilities and services will take a number of years to accomplish, but we already have an impressive suite of local entities and institutions who are working collaboratively with us to identify the optimum solutions.”

Smith said Heatherdale’s efforts to identify sites that meet specific criteria for development of a processing plant and tailings storage facility for Niblack have been met with positive encouragement from a broad range of local entities. He expressed confidence that offsite milling is a viable option for Niblack, particularly given the proactive assistance being provided by state and regional institutions.

“To the greatest degree possible, we want the Niblack Project to benefit the people and communities of Southeast Alaska,” Smith said. “Since day one, the priority at Niblack has been to employ local people, contract local companies and pursue local partnerships. We have every expectation that the attention we've paid to being a good neighbor now will be acknowledged in the future as the Niblack Project proceeds through permitting and into construction and operations.”

Heatherdale has made a strong effort in 2011 to meet with and provide status reports to community, tribal and Alaska Native corporation leaders from all of the island’s main communities – including Craig, Klawock, Kasaan and Hydaburg. Since the outset of its involvement with Niblack in 2009, Heatherdale has maintained a significant commercial partnership with the Prince of Wales Tribal Enterprise Consortium (POWTEC LLC) – owned by the Craig Tribal Association and the Organized Village of Kasaan – for the provision of human resources recruitment and administrative services. Through POWTEC, Heatherdale has trained and employed some 36 local people over the past three years.