Mining Stocks News: SilverCrest
(TSX: SVL) (NYSE MKT: SVLC) Announces Update to Santa Elena Pre-Feasibility
Study; Pre-Tax Base Case NPV (5%) of $144 Million, Replaces Reserves and Renews
8 Year Mine Life
Vancouver, BC - April 1, 2015 (Investorideas.com
Mining Stocks Newswire) SilverCrest Mines Inc. (TSX:SVL) (NYSE MKT: SVLC) is
pleased to announce that it has filed a Technical Report prepared in compliance
with National Instrument 43-101 Standards of Disclosure for Mineral Projects
("NI 43-101") titled, "Update to Santa Elena Pre-Feasibility
Study, Sonora, Mexico " (the "UPFS"), for its operating Santa
Elena mine. The UPFS updates the Santa Elena Pre-Feasibility Study and Open Pit
Resource Update, dated effective April 30, 2013, as amended March 4, 2014 (the
"2013 PFS"). Summaries of the updated Reserves and Resources, Life of
Mine Plan ("LOMP"), operating costs, sustaining capital costs and
project economics are presented in tables below. All dollar amounts are
expressed in U.S. dollars unless otherwise specified. The effective date of
this Technical Report is December 31, 2014 and is available on the Company's
website, www.silvercrestmines.com and
under the Company's profile on SEDAR at www.sedar.com.
The Base Case economic analyses use a range of
metal prices per ounce for gold and silver. For gold prices, the range is
defined as $1,250 (2015), $1,275 (2016) and $1,300 (2017 – 2022) and for silver
prices the range is defined as $18 (2015), $19 (2016), $20 (2017) and $21 (2018
– 2022). On this basis, the following economic highlights for a continued 8
year mine life beginning January 2015 are:
·
Total operating revenue of $555 million from
estimated sales of 12.6 million ounces of silver and 270,700 ounces of gold.
·
Total operating costs of $349 million.
·
Estimated cash operating costs averaging $11.59 per
silver equivalent ("AgEq") ounce (Ag:Au average ratio of 64.5:1 based
on sold ounces for LOMP).
·
Total sustaining capital costs of $31 million
including LOMP underground drilling programs and 2015 surface exploration
expenditures.
·
Total pre-tax undiscounted cash flow of $163
million including estimated closure cost deductions of $6 million.
·
Pre-tax Base Case pre-tax NPV (5%) of $144 million.
·
Post-tax Base Case post-tax NPV (5%) of $119
million.
Metal price sensitivities were completed including
spot price as $1,193 /oz Au and $16.16 /oz Ag (representing spot price in
December, 2014) which showed a pre-tax NPV (DCF @ 5%) of $84.3 million.
J. Scott Drever, Chief Executive Officer, stated;
"We are extremely pleased with the results of the reserve and economic
update for the Santa Elena mine. The study confirms our expectations that the
transition from the open pit heap leach operation to a conventional mill and
underground operation represents a very attractive project with robust
economics even at current reduced metal prices. The renewal of an 8 year mine
life gives SilverCrest a strong corporate cash flow that provides a solid
foundation for continued systematic and aggressive growth. We look forward to a
year of continuing operational and financial improvements in 2015 with
expansion of our annual metals production at Santa Elena."
MINERAL
RESERVES AND RESOURCE ESTIMATES AT DECEMBER 31, 2014
Update to Mineral Reserve and Resource are shown in
the table below. Only Indicated Resources were used in estimating the Mineral
Reserves related to the UPFS mine plan, schedule and economic analyses. In
summary, Total updated Probable Reserves at Santa Elena are 7.45 million tonnes
grading 1.23 gpt Au and 78.4 gpt Ag, containing 295,000 ounces of gold and
18.76 million ounces of silver. This represents an overall minimal decrease of
10% in contained gold and 5% in contained silver over previous Probable Reserves
stated in the 2013 PFS even after reserve depletion by mining and decreased
metal prices. Updated Indicated Resources (exclusive of Probable Reserves) are
estimated at 1.12 million tonnes grading 1.39 gpt Au and 89.7 gpt Ag,
containing 50,000 ounces of gold and 3.22 million ounces of silver. This
represents a 57% decrease in contained gold ounces and 59% decrease in
contained silver ounces over previous Indicated Resources. Updated Inferred
Resources are estimated at 0.56 million tonnes grading 1.69 gpt Au and 106.5
gpt Ag, containing 31 thousand ounces of gold and 1.9 million ounces of silver.
This represents a 57% decrease in contained gold ounces and 74% decrease in
contained silver ounces. The differences in UPFS Reserves and Resources from
the 2013 PFS are based on:
·
A minimal decrease of overall Probable Reserves
even after mining depletion over the last 1¾ years and changes in metal price
(cut off grade analysis) from the 2013 PFS of $1,450 per ounce of gold to
$1,300 and from $28 per ounce of silver to $19.50 .
·
Underground Probable Reserves have increased 8% in
contained ounces of gold and 8% in contained ounces of silver subsequent to the
2013 PFS and 2014 underground mining depletion.
·
Newly-defined El Cholugo underground Probable
Reserve of an estimated 252,000 tonnes grading 2.58 gpt Au and 147.0 gpt Ag.
This high grade zone is immediately adjacent to current underground development
and has been exposed on several levels for easy access and planned mining in
2016. This zone is open in most directions and is a 2015 priority for further
resource expansion with potential for conversion to reserves.
·
An 85% decrease in open pit Probable Reserves due
to depletion from mining from April, 2013 and some transfer to underground
reserves. Open pit was shut down in April, 2014 and reopened in January, 2015.
·
An 18% increase in leach pad Probable Reserves with
continuation of open pit mining in 2013 and 2014 and partial leaching (300 day
leach cycle) of ore.
·
Indicated and Inferred Resources decreased based on
conversion to Reserves, lower base case metal prices, updated geological
modelling with detailed infill drilling, and changes in geostatistical
parameters (smaller search radius) based on more exploration and production
data, including infill drilling data generated in 2013 and 2014.
·
Reserve replacement for a renewal of an 8 year mine
life, even after mining depletion from 2013 and 2014.
Note: All numbers are rounded. Underground and
Leach Pad Reserves and Resources are based on LOMP metal price trends of
$19.50/oz silver, $1,300/oz gold and metallurgical recoveries of 92% Au and
67.5% Ag. All Mineral Resources and Reserves conform to NI 43-101 and Canadian
Institute of Mining, Metallurgy and Petroleum definitions for Resources and
Reserves. Inferred Resources have been estimated from geological evidence and
limited sampling and must be treated with a lower level of confidence than
Indicated Resources.
* Underground Probable Reserve is based on a cutoff
grade of 2.49 gpt AuEq with an estimated average 10% dilution and 90% mine
recovery. Average true thickness of the designed stopes is 10 metres.
** Open Pit Reserve is based on a cutoff grade of
0.20 gpt AuEq in a constrained pit shell with applied capping of 8 gpt Au and
300 gpt Ag.
*** Leach Pad Reserve is based on production and
drill hole data for volumetrics and grade model using a cutoff grade of 0.5 gpt
AuEq. No capping was applied.
****Mineral Resources exclude Mineral Reserves and
are based on a 1.5 gpt AuEq cut off grade using assumptions for prices and
recoveries as stated in note above. Capping was applied at 12 gpt Au and 700
gpt Ag.
LOMP
The Santa Elena mine life with update to Reserves
is scheduled to continue for 8 years at nominal milling rate of 3,000 tonnes
per day with reduced throughput in the last two years upon depletion of leach
pad reserves. The mine schedule is based on mining long hole stopes (89% by
reserve volume) early in the mine life at attractive lower costs with small
reserve being mined using cut and fill stopes (11% by reserve volume) being
mined towards the end of the mine schedule. The 2013 PFS showed long hole and cut
and fill stopes were 69% and 31% by volume, respectively. The average width of
proposed optimized stopes is 10 metres, which is advantageous for lower cost
bulk mining methods. SilverCrest envisions a continued blending strategy during
operations at variable rates for mill feed to achieve optimum throughput. A
summary of the mine and production schedule is presented below with proposed
initial blending strategy.
Note: All numbers rounded.
*Ounces based on sold, not insitu Reserve.
LOMP
OPERATING COSTS
The operating cost estimates stated below were
compiled using Santa Elena mine site operating experience, SilverCrest
financial and operational reports, recent contractor quotes, other local
producing mines and industry estimations in Mexico to a Pre-Feasibility level.
1 Long hole stopes are 89% of designed stopes by
volume and cut & fill stopes are 11% of designed stopes by reserve volume.
Includes adjustment for exchange ratio impact in the mining costs and excludes
ore development costs.
2 Mining cost of spent ore on leach pad is covered
under processing costs.
3 Processing cost includes crushing, milling, site
refining and dry stack tailings disposal.
4 Estimated based on current operations and may
vary on an annual basis. A 4% annual inflation rate has been applied to general
and administrative costs.
Ore development costs are estimated at $36 /T ore
and represent approximately 6% of total underground ore planned to be mined
during LOMP.
LOMP
SUSTAINING CAPITAL COSTS
The sustaining capital cost estimates stated below
are based on internal estimates for remaining capital expenses over life of
mine.
Note: All numbers rounded.
UPFS
ECONOMIC ANALYSES
UPFS economic analyses were completed for both
pre-tax and post-tax. Base Case pre-tax and post-tax results are stated as
follows:
Note: All numbers rounded.
1 Sandstorm to be delivered an estimated 54,000
ounce of gold over remaining LOMP.
2 The financial model adopted a range of realized
spot prices from 2015 to 2022. Gold prices ranged from $1,250 to $1,300 per
ounce and silver prices ranged from $18 to $21 per ounce.
3 Excludes 0.5% governmental environmental fee of
an estimated $3 million.
4 Approximate operating cost per AgEq ounce sold
varies between $9 and $16 over the life of mine.
5 All LOMP underground drilling costs and only 2015
surface program costs included.
6 Excludes sunk costs, up to December 31, 2014.
The economic analyses considers SilverCrest
delivering 54,133 ounces of gold to Sandstorm Gold Ltd. ("Sandstorm")
at an average price of $412 per ounce ( $350 to $450 per ounce with annual 1%
inflationary increases) under the Sandstorm Purchase Agreement (the
"Purchase Agreement") executed on May 14, 2009 . The Purchase
Agreement included an option for Sandstorm to participate in the Santa Elena
underground mine, which Sandstorm had elected to exercise in February 2014. The
Purchase Agreement only applies to the original Santa Elena concessions and
excludes recent regional acquisitions.
UPFS
RECOMMENDATIONS
Further optimization of the mine schedule is
warranted to investigate continued grade optimization versus stoping costs
(long hole or cut and fill), potential to expand and accelerate increased
underground production with a second ramp and expand resources with subsequent
reserves. Mineralization at Santa Elena is open in most directions with
excellent potential to further increase resources and reserves for increased
production and mine life. Further infill and expansion drilling is recommended.
El Cholugo zone located immediately adjacent to the Main Mineralized Zone is a
priority target in 2015 for potential resource and reserve expansion. Silver
recoveries in the new plant facility need further metallurgical work to
potentially increase recovery rates. Recommended budget for further work is
estimated at $5 million to be spent over several years.
The Qualified Person for the Technical Report and
who has reviewed and approved the content of this news release is N. Eric Fier
, CPG, P.Eng, Chief Operating Officer of the Company.
SilverCrest
Mines Inc. (NYSE MKT: SVLC; TSX: SVL) is a Canadian precious
metals producer headquartered in Vancouver, BC . SilverCrest's flagship
property is the 100%owned Santa Elena Mine, located 150 kilometres northeast of
Hermosillo , near Banamichi in the State of Sonora , Mexico. The mine is a
highgrade, epithermal silver and gold producer, with a current reserve
estimated life of mine of 8 years and average operating cash costs of $12 per
ounce of silver equivalent (64.5:1 Ag:Au based on ounces sold). SilverCrest
anticipates the 3,000 tonnes per day conventional mill facility at the Santa
Elena Mine should recover an average of 1.6 million ounces of silver and 33,800
ounces of gold per annum over the current reserve life. Exploration programs
continue to result in discoveries at Santa Elena and have advanced the
definition of a large polymetallic deposit at the La Joya property in Durango
State, Mexico.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This news release contains "forward-looking
statements" within the meaning of Canadian securities legislation and the
United States Securities Litigation Reform Act of 1995. These include, without
limitation, statements with respect to: the economic viability of a project;
strategic plans and expectations for the development of the Company's
operations and properties; estimates of mineral reserves and mineral resources;
the amount of future production of gold and silver over any period; the amount
of expected grades and ounces of metals and minerals; expected cash operating
costs and outflows; life of mine and prices of metals and minerals.
These forward-looking statements relate to analyses
and other information that are based on, without limitation, the following
estimates and assumptions: presence of and continuity of metals at the
Company's projects; cost of production and productivity levels at the Santa
Elena Mine; availability and costs of mining equipment and skilled labour;
accuracy of the interpretations and assumptions used in calculating reserve and
resource estimates; operations not being disrupted or delayed by unusual
geological or technical problems; and ability to develop and finance projects.
Forward-looking statements are subject to a variety
of known and unknown risks, uncertainties and other factors which could cause
actual events or results to differ from those expressed or implied by the
forward-looking statements, including, without limitation: risks related to
precious and base metal price fluctuations; risks related to the fluctuations
in the price of consumed commodities; risks related to fluctuations in the
currency markets (particularly the Mexican peso, Canadian dollar and United
States dollar); risks related to the inherently dangerous activity of mining,
including conditions or events beyond our control, and operating or technical
difficulties in mineral exploration, development and mining activities;
uncertainty in the Company's ability fund the exploration and development of
its mineral properties; uncertainty as to actual capital costs, operating
costs, production and economic returns, and uncertainty that development
activities will result in profitable mining operations; risks related to
reserves and mineral resource figures being estimates based on interpretations
and assumptions which may result in less mineral production under actual
conditions than is currently estimated and to diminishing quantities or grades
of mineral reserves as properties are mined; and risks related to governmental
regulations and obtaining necessary licenses and permits.
Should one or more of these risks and uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described in the forward-looking statements. The
Company's forward-looking statements are based on beliefs, expectations and
opinions of management on the date the statements are made. For the reasons set
forth above, investors should not place undue reliance on forward-looking
statements. The Company undertakes no obligation to update or revise any
forward-looking statements, except as otherwise required by applicable law.
Contact:
Fred Cooper
Telephone: (604) 694-1730 ext. 108
Fax: (604) 694-1761
Toll Free: 1-866-691-1730
Email: info@silvercrestmines.com
Website: www.silvercrestmines.com
Suite 501 - 570 Granville Street, Vancouver, BC Canada V6C 3P1
Telephone: (604) 694-1730 ext. 108
Fax: (604) 694-1761
Toll Free: 1-866-691-1730
Email: info@silvercrestmines.com
Website: www.silvercrestmines.com
Suite 501 - 570 Granville Street, Vancouver, BC Canada V6C 3P1
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