some time back i mentioned that the hard times in the mining industry would actually work to the benefit of silver standard by making skilled labor and scarce equipment more available, and at lower prices, and by reducing competition for properties. today we have a concrete example of that.

geologix embarked on a program of 25,000 meters of drilling in the san agustin property. today was the deadline for them to come up with $34 million to purchase the property, but with their stock price trashed by last year's selloff, they had no viable option to raise the money.

so now after they proved up a resource of 3 million ounces of gold, 85 million ounces of silver, more than a billion tons of zinc, and a substantial amount of lead, the much improved property goes back to silver standard.

in the overall scheme of things, this isn't really that big a deal for us. it's a traumatic event for geologix, but this is just one more property in our portfolio that will wait its turn behind many others that are even better, or more likely be sold to someone else, and probably for a lot more than $34 million.

this transaction illustrates how unfairly silver standard's share price was punished by the credit crunch, even though the operations weren't hurt by it. while our company maintained the tempo of its exploration and development activities, so many others had to scale back, or even place their properties on care and maintenance. in fact the bad credit market has now even worked to our advantage as silver standard now has the benefit of all the work geologix did on san agustin, and all for free.

it's a raw deal for geologix, but that's why the exploration companies are highly speculative, and the larger companies like silver standard are the way to go right now, especially when our share price is still well down from its high.

Vancouver, B.C., February 10, 2009 - Geologix Explorations Inc. (the "Company") announces that, following an extensive review of data relating to the San Agustin property and strategic alternatives with respect to financing the required US$34.3 million payment to Silver Standard Resources Inc. ("Silver Standard") pursuant to the San Agustin Option Agreement ("Option Agreement"), the Company elected, effective February 10, 2009, not to exercise its option to acquire the property.

The Company, together with its financial advisors, CIBC World Markets Inc., examined various means of financing the option payment in a manner that best served the shareholders of the Company, including a transaction with strategic investors and financing in the capital markets. Although a number of strategic investors conducted extensive due diligence on San Agustin, no proposals were received in the time required by the Option Agreement.

The Company advanced the San Agustin project throughout late 2008 and into 2009. Results from continued metallurgical test work received in 2009, indicate that further work is required to ascertain the expected metal recoveries from San Agustin with a high degree of confidence. Furthermore, the Company continued to engage with local community land owners to secure long term access rights to San Agustin, however, no agreement was reached. Consequently, the Company sought to amend the terms of the Option Agreement with Silver Standard to allow for revised and extended payment terms. However, Silver Standard did not accept or counter any of the Company's proposals.

President and CEO, Dunham Craig stated "Considering the Company's commitment to San Agustin over the past two years and the ongoing nature of the work at San Agustin, we are disappointed that a revised payment schedule with Silver Standard was not achieved.

http://www.geologix.ca/s/NewsRelease...