SilverCrest Mines Inc. (TSX:SVL) (NYSE MKT:SVLC) is pleased to provide an update for the transition of the Santa Elena Mine in Sonora, Mexico from open pit heap leach to underground mining and milling operations. Activities at the mine are now moving from capital intensive expenditures for the overall Expansion Plan to operating costs and sustaining capital expenditures for underground development with emphasis on generating free cash flow through continued strict cost controls. The most significant transition activities are outlined below. For additional information and to view photos and videos, please visit the Company’s website at www.silvercrestmines.com.
N. Eric Fier, President and COO stated; “We are pleased with our transition to a conventional milling operation at the Santa Elena Mine. The commissioning of the mill was completed on budget as of August 1, 2014. The ramp up of underground stope production to 1,500 tonnes per day has encountered short-term delays. These delays are primarily due to finalizing detailed stope designs based on recent in-fill drilling with associated geotechnical constraints. Also, delays in long-hole drilling start-up for stope development are attributed to personnel training in drilling procedures while testing stope ground support. These short-term delays are manageable but will impact previously announced 2014 metal production guidance of approximately 3.3 million AgEq ounces at a ratio of 60:1. Guidance for 2014 is now projected to range from 3.0 to 3.3 million AgEq ounces. Estimated operating cash costs for 2014 of $8.50 to $9.50 per AgEq ounce and all-in sustaining cash costs of $11 to $12 per AgEq ounce, remain unchanged. These costs continue to make SilverCrest one of the lowest cost producers in the sector with anticipated free cash flow for Q4 2014”.
Santa Elena Transition
-- The new mill and CCD/Merrill Crowe processing plant is currently running
at an average throughput of 2,500 tonnes per day. Grind size testing for
optimization is ongoing which impacts throughput, recoveries and
efficient operation of the dry tailings belt filters. Optimized milling
rate of 3,000 tonnes per day is targeted for Q4 2014.
-- Current underground ore development grades are averaging 1.72 gpt Au and
115.4 gpt Ag which is consistent with reserve estimates. Average pad ore
grades in September 2014 are 0.68 gpt Au and 50.0 gpt Ag or 8% and 38%
higher, respectively than budget.
-- The plant is currently processing a blended mix of 30% underground
development ore and 70% pad ore with an average blended grade of 1.0 gpt
Au and 71.2 gpt Ag.
-- Approximate mill recovery rates of 90% for gold and 68% for silver are
consistent with budget target rates. It is anticipated that recoveries
will increase as the mill grind size is optimized.
-- For Q4 2014, monthly metal production is projected to range from 3,000
to 3,750 ounces of gold and 140,000 to 180,000 ounces of silver to
achieve guidance of 3.0 to 3.3 million.
-- Although behind schedule, mining the first production stope has
commenced which is being developed between the 600m and 575m levels.
Underground ramp access continues to be driven ahead of mine development
with the bottom of the ramp currently at the 564m elevation. Completion
of a ventilation raise in Q4 2014 is expected to increase operating
efficiencies and improve advancement rates for both underground
development and mine production.
-- Total underground development to date, including ramping, lateral ore
and waste development, and raise development, is approximately 6,000
metres. Six levels currently have ore and partial waste development
completed in anticipation of stope production.
-- With major capital expenditures completed for the 3 year long Expansion
Plan, the Company anticipates generating free cash flow in Q4 2014 at
current precious metal prices.
The Company is assessing the possibility of re-opening the Santa Elena open pit over the next 2 months which would increase projected metal production for Q4 2014 and H1 2015, providing safety and permitting requirements are met. Approximately 100,000 tonnes grading 1.4 gpt Au and 88.0 gpt Ag remain in the pit for possible low cost excavation and mill processing.
The Qualified Person under NI 43-101 for this News Release is N. Eric Fier, CPG, P.Eng, President and Chief Operating Officer for SilverCrest Mines Inc., who has reviewed and approved its contents.
SilverCrest Mines Inc. 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, Mexico. The mine is a high-grade, epithermal silver and gold producer, with an estimated life of mine of 8 years at an average operating cash costs of $11 per ounce of silver equivalent (55:1 Ag:Au). SilverCrest anticipates that the new 3,000 tonnes per day conventional mill facility at the Santa Elena Mine should recover an average of 1.5 million ounces of silver and 32,800 ounces of gold per annum over the current reserve life. Major expansion and commissioning of the 3,000 tonnes per day conventional mill facility is complete and is expected to increase metals production at the Santa Elena Mine in the second half of 2014 and beyond. Exploration programs continue to result in 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, Mexico.
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