Silver Standard and Russian Partners Sign Lunnoe Formal Agreements

Business Wire, Jan 27, 1997

VANCOUVER, BRITISH COLUMBIA--(BUSINESS WIRE)--Jan. 27, 1997-- Silver Standard Res. (VcSE: SSO., NASDAQ: SSRIF. ) Silver Standard Resources Inc. is pleased to report that the company has concluded formal agreements with GEOLOG, its Russian partner, on terms for the development of the Lunnoe and Arylach deposits in Far East Russia. GEOLOG, a closed joint stock company, holds two exploitation licenses totalling 60 km2 located approximately 660 kilometres northeast of Magadan in the Magadan Oblast.

Based on surface drilling and underground development, the Lunnoe deposit is estimated to contain 120 million ounces of silver and 500,000 ounces of gold and the Arylach deposit, located 30 kilometres north of the Lunnoe deposit, is estimated to contain 40 million ounces of silver.

Under the terms of the formal agreement, Silver Standard increased its interest to 50 percent of GEOLOG'S issued and outstanding shares. The other shareholders are Magadan Gold and Silver Company, a closed joint stock company, and Artel Poisk, which each own 25 percent of GEOLOG.

To maintain its 50 percent interest, Silver Standard has agreed to provide all financing necessary for commercial production on the Lunnoe license held by GEOLOG. Silver Standard will be the operator and will receive certain fees, both as operator and for arranging financing. If the company is unable to provide financing, Silver Standard is required to sell its GEOLOG shares to the other shareholders at cost. Silver Standard also agreed to contribute up to US$50,000 per month to GEOLOG's capital to pay basic operating costs, based on an approved budget.

The parties agreed that GEOLOG's board will consist of four people, of whom two will be appointed by Silver Standard, and one each by Magadan Gold and Silver and Artel Poisk. Silver Standard will appoint the chairman (who will have a casting vote) during implementation of production, after which the chairman will be appointed alternately by Silver Standard and its Russian partners. A subsidiary of Silver Standard will be the operator.

To date, Silver Standard has expended in excess of US$2.6 million toward project evaluation, engineering, metallurgical and environmental studies, and capital contributions to GEOLOG. Kilborn Engineering Pacific Ltd. is expected to complete its feasibility study on the Lunnoe and Arylach deposits early in the second quarter of 1997. In the year since work started on the Lunnoe project, Silver Standard has developed a good working relationship with its partners and will continue to work cooperatively with them to advance the project.

Silver Standard is a silver resource company with significant exploration projects in Far East Russia, Australia, Bolivia and Mexico. With an objective of acquiring or optioning in-situ silver resources of at least 250 million ounces by the end of 1997, Silver Standard is well positioned to achieve its goal of creating value for shareholders through advanced silver projects. -0- The Vancouver Stock Exchange has neither approved nor disapproved of the information contained herein.

CONTACT: Silver Standard Resources Inc.

R.E. Gordon Davis, 604/689-3846

or

Silver Standard Resources Inc.

Paul Lafontaine, 604/689-3846