Sterling Mining Issues Update

WALLACE, ID - Sterling Mining Company reported recent highlights from operations at the Sunshine Mine. (units are in short tons and troy ounces): Re-establishment of 3100 level Sunshine ramp (SR1) infrastructure, power and diesel shop; Resumption of ore production from the Sunshine vein below 3100 level; Processing of 5,500 tons of ore in April and May 2008 resulting in 77,000 ounces of silver converted to concentrate; head grades have increased as higher grade material has been mined from the lower levels; Shipments of concentrate for the year totaled 132.38 tons, with 50 tons of concentrate in inventory scheduled to ship in June; Mining of higher ore grades such that the silver/copper concentrate grade has increased from approximately 500 to over 1000 oz silver per ton; Re-establishment of 2700 West Chance infrastructure and diesel repair shop; and Commenced ore production from stopes both above and below 2700 level/.
In addition, Sterling commenced two development projects in the 3100 level Sunshine ramp area and completed a diamond drill program below the 2700 level in the West Chance vein system.
Goals for targeted completion or attainment during the second quarter are focused on increasing the number of ore producing stopes, adding mill capacity and increasing concentrate shipments. Specific goals include: Increasing mine production to 400 tons per day; Increasing monthly concentrate production to approximately 100 tons by the end of June or early July; Completing development access to two new West Chance stopes; Completing installation of radio communication system to 2700 and 3100 levels; Completing installation and renovation of the mine sandfill system; Commissioning Number 1 ball mill, increasing mill throughput from 32 to 42 tons per hour and Dewatering the mine to 3550 level (-867 ft below sea level).
The latest shipment of concentrates accounts for 63.4 of the 132.38 tons shipped for the year. This shipment was sent to an off shore smelter arranged through a concentrates off take agreement with Ocean Partners. Under the terms of the agreement, advance proceeds were paid upon presentation of a bill of lading, and as such, an advance of over $550,000 was received on the 2nd of June. Pursuant to the agreement, the smelter is committed to take up to 200 tons of concentrates and the Company is advancing discussions for further arrangements.
The company's address is 401 7th St. Wallace, ID 83873.