SilverCrest Declares Commercial Production at Santa Elena Mine; Pours 74,678 oz of Silver and 5,476 oz of Gold in Q2 2011
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 07/13/11 -- SilverCrest Mines Inc. (the 'Company') (TSX VENTURE: SVL) is pleased to report it has achieved Commercial Production at its 100% owned Santa Elena mine located in Sonora, Mexico. Commercial Production is deemed to have commenced when management determines that the operational commissioning of the mine shows:
-- a significant portion of mining, crushing, plant operating capacity has
been achieved;
-- all facilities are operating at a steady state of production; and
-- a pre-determined, reasonable period of operating time has passed.
Prior to achieving commercial production, revenues and related expenses have been recognized in Property Plant and Equipment as a reduction or increase respectively to carrying values of mining assets. Q2 of 2011 will be the first period reported as being commercial whereby revenues and expenses will be presented in forthcoming consolidated interim financial statements.
During 2011, which will be a partial year at full production rates, and based on the current life of mine plan, the mine is expected to produce approximately 430,000 ounces of silver and 26,000 ounces of gold. The first full year of production will be 2012 during which the mine is expected to produce 478,000 ounces of silver and 32,000 ounces of gold. From 2013 through 2016, there is a significant increase in recovered silver ounces of an estimated 750,000 to 1.1 million ounces per year. For additional information and to view production photos, please visit the Company's website at www.silvercrestmines.com.
The following summarizes the main highlights during the respective periods of the Commissioning Phase of Santa Elena and the first quarterly period of commercial production ending June 30, 2011;
----------------------------------------------------
Sept-Dec Jan-Mar Apr-Jun Total /
2010 Q1 2011 Q2 2011 Average
---------------------------------------------------------------------------
Silver ounces produced 54,886 64,712 74,678 194,276
Gold ounces produced 2,140 3,152 5,476 10,768
-
Silver ounces sold (i) 27,536 75,638 76,221 179,395
Gold ounces sold (i) 933 3,259 5,202 9,394
Ore tonnes crushed 244,627 218,527 249,054 712,208
Average ore tonnes
crushed per day 2,005 2,428 2,737 2,390
Average silver ore
grade (gpt) 34.77 34.07 44.02 34.39
Average gold ore grade
(gpt) 0.69 1.14 1.89 1.00
Silver ounces delivered
to pad 285,975 239,369 352,996 878,340
Gold ounces delivered
to pad 5,325 8,006 15,269 28,600
---------------------------------------------------------------------------
(i) Effective Q2, 2011, the Company's accounting policy is to record ounces
sold when they are delivered to the refiner.
-- The crusher is currently operating above daily designed throughput of
2,500 tpd with an average of 2,583 tpd for the period January through
June 2011 and an average of 2,737 tpd during Q2, 2011.
-- Estimated initial silver recovery of 21% and gold recovery of 38% are
consistent with budgeted numbers of 24% for silver and 41% for gold
during the Commissioning Phase. Projected total metal recoveries of 35
to 40% silver and 65 to 70% gold which are based on a 300 day leach
cycle appear to be achievable. The average time under leach for the Main
Zone higher grade ore is currently at 60 days.
-- The Main Zone is now being mined and leached with leach recovery times
similar to the extensive Metcon metallurgical testing and bulk column
test work. In June high grade ore being delivered from the Main Zone to
the pad averaged approximately 53.35 gpt Ag and 1.97 gpt Au and the
overall grade of the ore on the pad has increased from 40.35 gpt Ag and
0.60 gpt Au in January to 41.28 gpt Ag and 1.03gpt Au at the end of
June.
-- Metal production has increased steadily from 64,712 ounces of silver and
3,152 ounces of gold in Q1 to 74,678 ounces of silver and 5,476 ounces
of gold in Q2, 2011.
-- Loan payments of US$1.3 million and US$800,000 were made from production
revenues to Macquarie Bank Limited on March 31, 2011 and June 30, 2011,
respectively, Loan obligations of US$5.6 million remain for fiscal 2011.
As of June 30, 7,515 ounces of gold had been delivered in to the
Macquarie gold price protection program.
-- 1,879 ounces have been delivered to Sandstorm under the gold stream
agreement to the end of Q2, 2011.
-- No lost time accidents since construction started in 2009 with over
560,000 hours worked.
-- The Company currently has approximately $34.5 million in cash.
J. Scott Drever, President stated; 'We are certainly pleased at this time as to how the Commissioning Phase for the Santa Elena operations has progressed. All aspects of the operations are at design capacities and are functioning as expected with the exception of the crusher. We have experienced a number of operating challenges with crusher operations which have required operating times to be increased to an average of 18 hours per day rather than the budgeted 14 hours to meet production targets. Our supervisory personnel have worked diligently to assure that the normal start-up challenges were resolved and the project has reached a steady state at design capacity. The receipt of substantial revenues from the sale of our silver and gold production has reduced the amount of working capital required during start up and has set the stage for early, free cash flow that will be utilized to implement the Company's strategy for corporate growth.'
N. Eric Fier, CPG, P.Eng. and Chief Operating Officer for SilverCrest Mines Inc. and Qualified Person for this news release has reviewed and approved its contents.
SilverCrest Mines Inc. (TSX VENTURE: 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, Mexico. 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 (55:1 Ag:Au). SilverCrest anticipates that the 2,500 tonnes per day facility should recover approximately 4,805,000 ounces of silver and 179,000 ounces of gold over the 6.5 year life of the open pit phase of the Santa Elena Mine.
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, President
SILVERCREST MINES INC.
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.
Contacts:
SilverCrest Mines Inc.
Fred Cooper
(604) 694-1730 or
Toll Free: 1-866-691-1730
(604) 694-1761 (FAX)
info@silvercrestmines.com
www.silvercrestmines.com