🕐12.04.11 - 16:54 Uhr
SilverCrest Announces Santa Elena Expansion Plan Net Present Value of US$491M In
dicated at Current Metal Prices
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_SilverCrest Announces Santa Elena Expansion Plan_
_Net Present Value of US$491M Indicated at Current Metal Prices _
TSX-V SVL
For Immediate Release
Dear Subscriber,
VANCOUVER, B.C.
April 12,2011_ – SilverCrest Mines Inc.
("SilverCrest" or the "Company") is pleased to announce the positive results
of its Preliminary Assessment (“PA”) NI 43-101 Technical Report and updated
Mineral Resources and Reserves for its Santa Elena Mine located in Sonora,
Mexico.
The Expansion Plan (the “Plan”) contemplates the installation of a
conventional CCD processing facility at the Santa Elena mine with throughput
capacity of 2,500 tonnes per day utilizing mill feed from the Santa Elena
open pit (Phase I), the Santa Elena underground (Phase II), and re-treatment
of the material on the heap leach pads to recover residual silver and gold
values (Phase IV).
The nearby Cruz de Mayo silver deposit (Phase III) will
be treated on site as a heap leach operation with potential to ship high
grade ore to the Santa Elena proposed processing facility.
Summary of Santa Elena Expansion Plan PA
* Metal prices for the base case are US$18 per ounce of silver and
US$1,000 per ounce of gold.
The Au to Ag ratio for conversion is 55:1
based on recovered ounces and the base case metal prices.
* The Plan considers a conceptual 10 year mine life at an average annual
rate of 1.6 million ounces of silver and 39,000 ounces of gold or 3.8
million ounces of silver equivalent.
This would be a 52% increase of
produced metal from current operations.
* A 2,500 tonnes per day processing facility is proposed with potential to
increase to 3,500 tonnes per day.
At the increased rate, the current
annual metal production could potentially double to over 5.0 million
ounces silver equivalent per year.
* Initial capital costs are US$84 million of which US$47 million is for a
new processing facility.
* Estimated cash operating costs of US$9.70 per ounce of silver equivalent
produces an average annual net pre-tax cash flow of US$17 million using
base case metal prices and US$62 million per year at current metal
prices.
* At a 5% discount rate, the project has a base case Net Present Value of
US$131 million and US$491 million at current metal prices.
J.
Scott Drever, President stated;_ “The positive results of this PA have
confirmed our long standing belief that this Plan would be SilverCrest’s
next step to increasing production at Santa Elena and that it would provide
more free cash flow from which the Company can grow and prosper.
We are
convinced that the next 3 production expansion phases will increase our
projected annual production of 2.5 million ounces of silver equivalent, from
the current operation, by more than 50% using a 2,500 tpd capacity plant or
more than 100% with a 3,500 tpd plant.
We fast tracked Phase 1 of this
project initial drilling to production and now we expect to apply the same
diligence to the next phase of expansion.
With the excellent economic
results of the PA we are anxious to begin the site programs needed to move
the Plan recommendations towards a Pre-Feasibility Study and take advantage
of expected buoyant precious metal prices.”
Capital & Operating Costs for Expansion Plan
* Initial capital costs are estimated at US$84.1 million, including a 25%
contingency.
Sustaining capital costs are estimated at US$21.0 million,
including an average contingency of 22% over the 10 year mine life.
* Initial major capital costs (US$) consist of $47 million for the mill
and related facilities; $10.5 million for underground development and
setup; $5.9 million for development of the Cruz de Mayo deposit; $5.3
million for tailings and $16.8 million in contingency.
* Base Case cash operating costs are approximately US$9.70 per ounce of
silver equivalent.
Gold to silver conversion is based on an Au:Ag ratio
of 55:1 using base case metal prices and combined heap leach and
conventional mill overall metallurgical recoveries of 87.2% gold and
68.9% silver.
Project Economics & Metal Price Sensitivities for Expansion Plan
Case Average Average Pre-Tax Net Pre-Tax NPV
Gold Price Silver Price Cash Flow @ 5% Discount
(US$) (US$) (US$ millions) (US$ millions)
Low 800.00 14.00 47.5 34.1
Base 1,000.00 18.00 169.5 131.2
Current Prices 1,450.00 38.00 620.6 491.4
High 1,600.00 50.00 856.5 680.1
Project economics and sensitivities reflect the use of US$926.5 per ounce of
gold for 55,000 delivered ounces under the Company’s price protection
program and US$350 per ounce for 20% of the gold ounces produced from the
open pit for delivery under the Sandstorm gold stream agreement.
Base case
metal prices of US$18 per ounce for silver and US$1,000 per ounce of gold
for life of mine were used for calculation of cut off grades for Mineral
Reserve and Resource estimation.
SilverCrest has also completed project
sensitivity analyses using variations of capital and operating costs as well
as metal recoveries.
These analyses indicate that the project is less
sensitive to capital and operating cost than to metal recoveries, grade and
metal pricing.
The study has taken a focused effort over several months to complete and has
involved the combined team efforts of independent qualified persons,
professionals and consulting companies that included SilverCrest Mines
(Mineral Resources, Reserves, Production Capital and Operating Costs), EBA
(Environmental, Mining Engineering, and Economics), Allard (Metallurgy and
Process Design), C.
Stewart Wallis, P.Geo.
(Cruz de Mayo Mineral Resource)
and Wardrop (Processing Engineering and Design).
Further work on resource
delineation, geotechnical, hydrogeology, metallurgy and costing is suggested
as part of a recommended Pre Feasibility Study to be completed over the next
9 to 12 months including constructing an underground exploration decline.
Mineral Resources and Reserves
The following Mineral Resources estimate is a revised statement of the
previous Mineral Reserves and Resources for Santa Elena and Cruz de Mayo as
presented in the February 15, 2009 Technical Report.
These revisions are
effective as of January 2011 and use higher metal prices and lower cutoff
grades (see notes below the table).
The Santa Elena Mineral Resources have
been adjusted to reflect 2010 open pit production.
Santa Elena & Cruz de Mayo Gold and Silver Mineral Resources (January 2011)
SANTA ELENA & CONTAINED CONTAINED
CRUZ DE MAYO RESOURCES TONNES AU GPT AG GPT AU OZ AG OZ
Santa Elena Indicated* 6,906,000 1.62 77.4 359,300 17,194,000
Santa Elena Inferred* 6,198,000 0.78 53.4 155,200 10,631,000
Cruz de Mayo Indicated** 1,141,000 0.06 64.2 2,300 2,353,400
Cruz de Mayo Inferred** 6,065,000 0.07 66.5 13,300 12,967,100
Total Indicated 8,047,000 1.40 75.5 361,600 19,547,400
Total Inferred 12,263,000 0.42 59.8 168,500 23,598,100
Note: Conforms to NI 43-101, 43101CP and current CIM definitions for Mineral
Resources and Reserves.
All numbers are rounded.
Mineral Resources that are not
Mineral Reserves do not have demonstrated economic viability
*based on US$1,000/oz of gold and $18/oz of silver, cut-off grade of 0.38
gpt gold equivalent at applied metallurgical recoveries.
Inclusive of Santa
Elena open pit indicated resources that have been converted to probable
reserves which are stated below.
Adjusted and depleted for 2010 mine
production.
**based on a silver cut-off grade is 30 gpt.
This is presented in the 2007
Fier and Stewart Technical Report.
The Santa Elena Resource estimates stated above have been adjusted by
applying economic constraints and metallurgical recoveries to approximate
the Mineable, Diluted Reserves and underground Resources for PA purposes
using base case metal prices.
The resulting Santa Elena Resources and
Mineable, Diluted Reserves adjusted for 2010 production are shown below
along with Cruz de Mayo Resources;
Santa Elena & Cruz de Mayo Gold and Silver Resources and Reserves (January
2011)
SANTA ELENA OPEN PIT RESERVES TONNES AU GPT AG GPT CONTAINED CONTAINED
AU OZ AG OZ
PROBABLE* 4,794,790 1.81 75.9 278,560 11,711,000
SANTA ELENA UNDERGROUND
RESOURCES**_
INDICATED 991,100 1.83 109.1 58,330 3,476,960
INFERRED 1,879,000 1.53 86.9 92,470 5,250,190
CRUZ DE MAYO RESOURCES***
INDICATED 1,141,000 0.06 64.2 2,300 2,353,400
INFERRED 6,065,000 0.07 66.5 13,300 12,967,100
TOTALS_
TOTAL PROBABLE 4,794,790 1.81 75.9 278,560 11,711,000
TOTAL INDICATED 2,132,100 0.88 85.0 60,630 5,830,360
TOTAL INFERRED 7,944,000 0.41 71.3 105,770 18,217,290
Notes: Conforms to NI 43-101, 43101CP and current CIM definitions for
Mineral Resources and Reserves.
All numbers are rounded.
Mineral Reserves
are diluted and mine recoverable.
Adjusted and depleted for 2010 mine
production.
All numbers are rounded.
Mineral Resources that are not Mineral
Reserves do not have demonstrated economic viability
* based on US$1,000/oz of gold and US$18/oz of silver, cut-off grade of 0.38
gpt gold equivalent with applied metallurgical recoveries.
**based on US$1,000/oz of gold and US$18/oz of silver, cut-off grade is 1.77
gpt gold equivalent with applied metallurgical recoveries.
***based on a silver cut-off grade is 30 gpt.
This is presented in the 2007
Fier and Stewart Technical Report.
Variances from previously stated Santa Elena Mineral Resources and Reserves
for Technical Reports in August 2008 and February 2009 compared to the above
revised estimates of January 2011 are a result of application of mining
dilution, the use of underground sample results and surveys of the
underground workings as well as more current and more accurate sampling
results from 2010 blast hole production data.
Also, changes to ore and waste
densities and the use of a variety of new geostatistical software and block
modeling generally reduced the tonnages but increased the grades for the
Probable Reserves.
The net cumulative effect of these changes is an increase in total resource
tonnes and a decrease in the total contained ounces of gold of silver for
Santa Elena (please refer to the Technical Report for details).
Most of this
decrease is in the deeper portions of the deposit and is attributed to
widely spaced drill intercepts in the mineralized zone.
This resulted in
lower influence of the high grade distribution and variations in the
geostatistical treatment of some lower grade mineralized intercepts which
decreased overall grades in parts of the deposit.
As a result of the
conversion of Indicated Mineral Resources to Reserves and the difference in
the cutoff grades used to calculate open pit reserves and underground
resources, there are a significant number of ounces inaccessible between the
economic bottom of the pit and the proposed underground resources.
Inclusion
of these resources is dependent largely on metal prices and could likely be
included in either the open pit or underground resource if metal prices
continue to escalate and cut-off grades are lowered.
Significant potential
exists to increase resources with further infill drilling and expansion
drilling in the Santa Elena underground and Cruz de Mayo.
Comments with respect to Phase II, Phase III and Phase IV of the Preliminary
Assessment in this press release are conceptual in nature and there is no
assurance that that economic recovery of estimated resources will be
achieved.
Generally, the accuracy of Preliminary Assessment estimations is
in the order of plus or minus 30%.
The Phase I open pit heap leach has been
successfully constructed and is in the commissioning stage of operations.
This news release has been prepared by N.
Eric Fier, CPG, P.Eng , Chief
Operating Officer and Qualified Person for the Company.
John Chow, M.AusIMM
of EBA, a Tetra Tech Company, C.
Stewart Wallis, P.Geo.
and Geoff Allard,
P.E.
are Independent Qualified Persons for the Preliminary Assessment and
have reviewed the contents of this news release.
A NI 43-101 Technical
Report detailing the results of the Preliminary Assessment will be filed on
[2]www.sedar.com promptly after this release.
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SilverCrest Mines Inc.
(TSX-V: SVL) is a Mexican precious metals producer
with headquarters based in Vancouver, BC.
SilverCrest’s flagship property is
the 100%-owned Santa Elena Mine, which is located 150km northeast of
Hermosillo, near Banamichi in the State of Sonora, México.
The mine is a
high-grade, epithermal gold and silver producer, with an estimated life of
mine cash cost of US$8 per ounce of silver equivalent.
SilverCrest
anticipates that the current 2,500 tonnes per day facility will produce
approximately 800,000 ounces of silver and 30,000 ounces of gold per full
production year from the initial open-pit heap leach operation.
This news release contains forward-looking statements, which address future
events and conditions, which are subject to various risks and uncertainties.
The Company’s actual results, programs and financial position could differ
materially from those anticipated in such forward-looking statements as a
result of numerous factors, some of which may be beyond the Company’s
control.
These factors include: the availability of funds; the timing and
content of work programs; results of exploration activities and development
of mineral properties, the interpretation of drilling results and other
geological data, the uncertainties of resource and reserve estimations,
receipt and security of mineral property titles; project cost overruns or
unanticipated costs and expenses, fluctuations in metal prices; currency
fluctuations; and general market and industry conditions.
Forward-looking
statements are based on the expectations and opinions of the Company’s
management on the date the statements are made.
The assumptions used in the
preparation of such statements, although considered reasonable at the time
of preparation, may prove to be imprecise and, as such, undue reliance
should not be placed on forward-looking statements._
“J.
Scott Drever”
J.
Scott Drever, President_
For further information, please contact:
Fred Cooper
570 Granville Street, Suite 501
Vancouver, BC V6C 3P1
Telephone: (604) 694-1730
Fax: (604) 694-1761
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Website: [4]www.silvercrestmines.com
Toll Free: 1-866-691-1730 (Canada & USA)
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Neither TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
SilverCrest Mines Inc.
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- 570 Granville St., Suite 501 V6C 3P1, Vancouver BC
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