Vancouver, British Columbia - July 25, 2013 (Investorideas.com Mining Stocks Newswire) SilverCrest Mines Inc. (
TSX.V:SVL) (
NYSE MKT: SVLC)
is pleased to announce that it has filed its NI 43-101 Technical Report
entitled “Santa Elena Expansion Pre-Feasibility Study and Open Pit
Reserve Update” for its operating mine located in Sonora, Mexico.
Summaries of the revised Life of Mine Plan (LOMP), operating costs,
capital costs and Expansion 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 April 30,
2013.
The economic analyses use Base Case metal prices of $1450/ounces of
gold and $28/ounces of silver (3 year average historical trend). On
this basis, the following economic highlights for an additional 8 years
of mine life beginning in January 2014 are;
- Total operating revenue of $684.9 million from estimated sales of 12.11 million ounces of silver and 262,739 ounces of gold.
- Total operating costs of $282.2 million with estimated cash
operating costs averaging US$11/ounce AgEQ for mine life with lower
costs in initial years.
- Total capital costs of $87.8 million including contingency but excluding sunk costs up to April 30, 2013.
- Total pre-tax cash flow of $302.5 million including estimated
cost deductions for closure (US$ 5 million) and working capital (US$1.8
million).
- Base Case pre-tax NPV (DCF @ 5%) of $243.7 million including
2013 estimated net cash flow of $20 million at $1250 /ounce of gold and
$19.50/ounce of silver after effective date of April 30, 2013 .
- IRR of 88% based on incremental project economics excluding sunk costs up to April 30, 2013.
- Payback period of 1 year.
- AgEQ based on a ratio of 70:1 which includes average metallurgical recoveries of 92% Au and 67.5% Ag for all milling ores.
Metal price sensitivities were completed including $1250/oz Au and
$19.50/oz Ag which showed a pre-tax NPV (DCF @ 5%) of $128.7M (including
2013 est. net cash flow) and an IRR of 49%.
Updated Mineral Reserve and Resource estimations for Santa Elena
Mine were announced in a news release dated May 29, 2013 which showed
Probable Reserves (underground, open pit and leach pad) at an estimated
8.2 million tonnes grading 74.9 gpt Ag and 1.24 gpt Au containing 19.7
million ounces of silver and 327,430 ounces of gold. Updated Indicated
Resources
(exclusive of Probable Reserves) were estimated at 2.1 million tonnes
grading 114.9 gpt Ag and 1.69 gpt Au containing 7.9 million ounce of
silver and 116,000 ounces of gold. Only Mineral Reserves were used in
the PFS mine plan, schedule and economic analysis. Mineralization at
Santa Elena is open in most directions with excellent potential to
further increase resources and reserves for increased production and
mine life.
J. Scott Drever, Chairman and CEO commented: “We are extremely
pleased with the results of the PFS which confirms our expectations that
the transition from our open pit heap leach operation to a conventional
mill and underground operation will represent a very attractive project
with robust economics even at current reduced metal prices. The 8 year
mine life will give SilverCrest a strong corporate cash flow providing a
solid foundation for continued systematic and aggressive growth. We
look forward to a banner year in 2014 with the commissioning of the new
processing facility in the first quarter and the significant expansion
of our annual metals production at Santa Elena.”
EXPANSION LIFE OF MINE PLAN
The Santa Elena mine life with updated Reserves is scheduled for an
additional 8 years at nominal milling rate of 3,000 tonnes per day. The
mine schedule is based on mining long hole stopes (69% by reserve
volume) early in the mine life at attractive lower costs with higher
cost cut and fill stopes (31% by reserve volume) being mined towards the
end of the mine schedule. The average width of proposed stopes is 13.4
metres which is advantageous for lower cost bulk mining methods.
SilverCrest envisions a 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.
1 Included for Reserve declaration purposes only but not included in economic analyses for the Expansion
This plan excludes an estimated 750,000 tonnes of heap leach spent
ore which will be placed on the pad in 2013 and accounted for in early
2014 as additional material for reprocessing during the mine life.
EXPANSION 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 69% of designed stopes by
volume and cut & fill stopes are 31% of designed stopes by reserve
volume. Excludes ore development costs. $/t inclusive of ore dev. Is
estimated at $21 to $48.
2 Processing includes crushing, milling, site refining and dry stack tailings disposal.
3 Estimated based on current operations and may vary on an annual basis.
EXPANSION CAPITAL COSTS
The capital cost estimates stated below were compiled using Santa
Elena mine site experience, recent contractor quotes, other local
producing mines and industry estimations in Mexico to a Pre-Feasibility
level.
EXPANSION ECONOMIC ANALYSIS
Pre-Feasibility level economic analyses were completed for both
pre-tax and post-tax. Base Case pre-tax results are stated as follows;
1 Operating cost per AgEQ oz. sold varies between $9.6 and $12.6 over the life of mine
2 Excludes sunk costs, up to April 30, 2013, closure costs and working capital
3 Includes deductions of $5 million for closure costs and $1.8 million for working capital
4 Includes 2013 estimated net cash flow after effective date of April 30, 2013
5
The IRR presented here do not reflect total project economics but
reflect incremental project economics as they do not include sunk costs
for the Santa Elena expansion prior to April 30 2013
The economic analyses consider SilverCrest delivering a remaining
31,000 ounces of gold (2014 and beyond) to Sandstorm Gold Ltd.
(Sandstorm) at a price of $350/oz under the Sandstorm Purchase Agreement
executed on May14th, 2009. It does not include the option held by
Sandstorm to participate in the future underground mine production which
would require payment by Sandstorm of 20% (pro-rata of gold) of the
capital costs with a subsequent increase of gold price for 20% of
produced ounces to $450/oz Au. Sandstorm may elect to participate in the
expansion, once SilverCrest provides a preliminary technical report
that includes amongst other items; the required capital costs associated
with the transition from open pit heap leaching to a conventional mill
facility and underground mine.
EXPANSION PRE-FEASIBILTY RECOMMENDATIONS
Further optimization of the mine schedule is warranted to
investigate grade optimization versus stoping costs (long hole or cut
and fill), potential to expand and accelerate increased underground
production with a second ramp for the bottom of the pit and expand
milling capacity. These optimizations will be addressed in detail after
successfully announcing commercial production for the new mill facility
in 2014. 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.
The Qualified Persons for this Technical Report and who have
reviewed and approved the contents of this news release are N. Eric
Fier, CPG, P.Eng., President and Chief Operating Officer for the
Company, James Barr., P.Geo., Mike Tansey, P.Eng. and Carlos Chaparro,
P.Eng. from the consulting firm of EBA, a Tetra Tech Company, and John
Fox, P.Eng. of Laurion Consulting Inc.
SilverCrest Mines Inc. (TSX VENTURE:SVL)(NYSE MKT:SVLC) is a
Canadian precious metals producer headquartered in Vancouver, BC.
SilverCrest's flagship property is the 100%-owned Santa Elena Mine,
located 150 km northeast of Hermosillo, near Banamichi in the State of
Sonora, México. The mine is a high-grade, epithermal silver and gold
producer, with an estimated life of mine cash cost of US$8 per ounce of
silver equivalent (55:1 Ag: Au). SilverCrest anticipates that the 2,500
tonnes per day open pit heap leach facility at the Santa Elena mine
should recover approximately 625,000 ounces of silver and 33,000 ounces
of gold in 2013. Major expansion and construction of a 3000 tonnes per
day conventional mill facility is underway to significantly increase
metals production at the Santa Elena Mine (open pit and underground) by
2014. Exploration programs continue to make new discoveries at Santa
Elena and also have rapidly advanced the definition of a large
polymetallic deposit at the La Joya property in Durango State with
stated resources nearing 200 million ounces of Ag equivalent.
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. Such forward-looking
statements concern the Company's anticipated results and developments in
the Company's operations in future periods, planned exploration and
development of its properties, plans related to its business and other
matters that may occur in the future. These statements relate to
analyses and other information that are based on expectations of future
performance, including silver and gold production and planned work
programs. Statements concerning reserves and mineral resource estimates
may also constitute forward-looking statements to the extent that they
involve estimates of the mineralization that will be encountered if the
property is developed and, in the case of mineral reserves, such
statements reflect the conclusion based on certain assumptions that the
mineral deposit can be economically exploited.
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
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 to raise financing and 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; risks related to governmental regulations and
obtaining necessary licenses and permits; risks related to the business
being subject to environmental laws and regulations which may increase
costs of doing business and restrict our operations; risks related to
mineral properties being subject to prior unregistered agreements,
transfers, or claims and other defects in title; risks relating to
inadequate insurance or inability to obtain insurance; risks related to
potential litigation; risks related to the global economy; risks related
to the Company's status as a foreign private issuer in the United
States; risks related to all of the Company's properties being located
in Mexico and El Salvador, including political, economic, social and
regulatory instability; and risks related to officers and directors
becoming associated with other natural resource companies which may give
rise to conflicts of interests. 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 information provided in this news release is not intended to be
a comprehensive review of all matters and developments concerning the
Company. It should be read in conjunction with all other disclosure
documents of the Company. The information contained herein is not a
substitute for detailed investigation or analysis. No securities
commission or regulatory authority has reviewed the accuracy or adequacy
of the information presented.
J. Scott Drever
Chairman and CEO
SILVERCREST MINES INC.
Contact:
SilverCrest Mines Inc.
Fred Cooper
(604) 694-1730 ext. 108
Toll Free: 1-866-691-1730
(604) 694-1761
info@silvercrestmines.comwww.silvercrestmines.com
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