TSX: SVL NYSE MKT: SVLC
VANCOUVER, March 31, 2015 /PRNewswire/ - SilverCrest
Mines Inc. ("SilverCrest" or the "Company") 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.
|
SANTA ELENA
RESERVES (DECEMBER 31, 2014)
|
CLASSIFICATION
|
TONNES
|
AU
GPT
|
AG
GPT
|
CONTAINED
AU
OZ
|
CONTAINED
AG
OZ
|
|
SANTA ELENA
UNDERGROUND DILUTED AND RECOVERABLE RESERVES*
|
PROBABLE
|
3,981,557
|
1.67
|
115.0
|
214,000
|
14,724,000
|
SANTA ELENA OPEN
PIT RESERVES**
|
PROBABLE
|
121,706
|
2.75
|
117.0
|
11,000
|
458,000
|
SANTA ELENA LEACH
PAD RESERVES (PAD ORE)***
|
PROBABLE
|
3,344,652
|
0.65
|
33.3
|
70,000
|
3,582,000
|
TOTAL SANTA ELENA
RESERVES
|
PROBABLE
|
7,447,915
|
1.23
|
78.4
|
295,000
|
18,764,000
|
SANTA ELENA
RESOURCES (DECEMBER 31, 2014) ****
|
INDICATED
|
1,117,033
|
1.39
|
89.7
|
50,000
|
3,220,000
|
INFERRED
|
564,074
|
1.69
|
106.53
|
31,000
|
1,932,000
|
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.
|
|
|
|
|
|
|
|
|
|
Aspect of
operations
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021
|
2022
|
Total
Life of
Mine
|
Total Tonnes
Underground
|
462,200
|
543,000
|
521,100
|
535,400
|
493,700
|
497,600
|
434,300
|
494,300
|
3,981,600
|
Total Tonnes Leach
Pad
|
502,300
|
543,200
|
565,100
|
550,800
|
592,500
|
588,600
|
2,200
|
-
|
3,344,700
|
Total Tonnes Open
Pit
|
121,700
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
121,700
|
Total Tonnes
Processed
|
1,086,200
|
1,086,200
|
1,086,200
|
1,086,200
|
1,086,200
|
1,086,200
|
436,500
|
494,300
|
7,448,000
|
Total Gold Ounces
Sold*
|
45,000
|
45,500
|
37,200
|
35,800
|
29,400
|
38,300
|
23,500
|
16,000
|
270,700
|
Total Silver
Ounces Sold*
|
2,048,400
|
2,111,400
|
1,750,000
|
1,888,800
|
1,487,200
|
1,492,100
|
953,500
|
914,800
|
12,646,200
|
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.
|
|
|
|
|
Mining
Method
|
Open
Pit
|
Underground
Long
Hole
Average
|
Underground
Cut &
Fill
Average
|
Leach
Pad
Reprocess
|
Process
Method
|
CCD Mill
|
CCD Mill
|
CCD Mill
|
CCD Mill
|
Mining Cost/T
ore1
|
$
|
9.90
|
$
|
28.71
|
$
|
50.00
|
$
|
0.002
|
Processing
Cost/T3
|
$
|
24.49
|
$
|
24.49
|
$
|
24.49
|
$
|
24.49
|
General &
Administration/T4
|
$
|
5.29
|
$
|
5.29
|
$
|
5.29
|
$
|
5.29
|
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.
|
Sustaining Capital
Cost Table Including Exploration Drilling Expense
|
Site
infrastructure
|
$
|
2,066,200
|
Mill sustaining
capital
|
$
|
1,785,000
|
Underground waste
development expenses
|
$
|
16,086,600
|
Underground equipment
and infrastructure
|
$
|
6,236,300
|
Underground and 2015
surface drilling
|
$
|
4,783,300
|
Total
capital costs
|
$
|
30,957,400
|
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:
|
Aspects of Santa
Elena UPFS Economic Analyses
(Base
Case)
|
Production
|
|
Gold Ounces Sold -
post refiner credit1
|
|
270,700
|
|
Silver Ounces Sold -
post refiner credit
|
|
12,646,200
|
Revenue
|
$
|
(000)
|
|
Gross
Sales2
|
$
|
554,530
|
Operating
Expenses3
|
|
Total Operating
Costs4
|
$
|
348,900
|
|
Freight &
Refining
|
$
|
5,750
|
|
Closure
Costs
|
$
|
6,000
|
Sustaining Capital
Expenses
|
|
Underground &
Surface Drilling5
|
$
|
4,780
|
|
Sustaining Capital
Costs6
|
$
|
26,170
|
Pre-Tax
Undiscounted Cash Flow
|
|
Total Cash
Flow
|
$
|
162,930
|
Pre-Tax Financial
Results
|
|
Pre-Tax NPV, DCF @
5%
|
$
|
143,840
|
Post-Tax Financial
Results
|
|
Post-Tax NPV, DCF @
5%
|
$
|
119,170
|
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.
6Excludes 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
processing recoveries; 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.
SOURCE SilverCrest Mines Inc.