Vancouver-based SilverCrest Mines (CVE:SVL)(NYSE MKT:SVLC)(AMEX:SVLC) released Tuesday results from its drill program at the Santa Elena mine in Sonora, Mexico, with the company noting the campaign has so far been successful in terms of the defined objectives.
Gold and silver values in the SERCP and SE series of holes ranged from 0.13 grams per tonne (g/t) to 8.6 g/t gold and 17.4 to 244.0 g/t silver. Mineralized intervals ranged from 6.0 to 52.0 metres.
The most significant intercepts were 52 metres grading 2.19 g/t gold and 95.5 g/t silver in hole SERCP-9V, and 16 metres grading 6.18 g/t gold and 103.4 g/t silver in hole SERCP-11A.
The miner drilled 5 core holes and 16 reverse circulation holes in a planned 110 hole-program designed to confirm tonnage and grade of the remaining open pit reserves for the life-of-mine plan, and to test further mineralization below the current open pit plan.
The campaign was also designed to test the newly found mineralization in the northwest highwall of the open pit, and to recategorize and expand underground resources.
The company said the drill program thus far has been successful and will support resource confirmation, conversion to reserves, and inclusion in the upcoming prefeasibility study for the Santa Elena expansion project.
Of the holes drilled, infill holes confirmed the projection of higher grades expected to be mined in the open pit in 2013 to 2014, SilverCrest said, and are being used to update the life-of-mine plan.
Holes drilled in Santa Elena undergound south showed increased potential for new underground resources below the pit, and are being included into the new resource model and expansion pre-feasibility study. Further drilling is expected next year.
Meanwhile, northwest holes at Santa Elena hit high grade values over 1 to 4 metres wide, the silver miner said, suggesting a possible new underground target with more drilling also anticipated in 2013.
Three drills are now on site at Santa Elena to complete the program by the end of the year. Revised Santa Elena resources and reserves are expected along with the pre feasibility study in the first quarter of next year.
The company said that 66 holes have been completed so far for the purpose of converting underground resources to reserves, with results anticipated once compilation is done.
Last month, Vancouver-based SilverCrest said it produced a record amount of silver during the third quarter, prompting it to hike its silver output forecast for the year.
The junior producer saw silver output of 151,368 ounces for the latest three month period from its Santa Elena mine, up by 42 per cent from the same period last year. The company cited improvements in recoveries for the higher-than-projected production.
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 2,500 tonnes per day facility should recover around 4.8 million ounces of silver and 179,000 ounces of gold over the 6.5 year life of the open pit phase of the mine.
A three year expansion plan is underway to double metals production at the Santa Elena Mine and exploration programs are advancing the definition of a large polymetallic deposit at the La Joya property in Durango State.
"Based on our production to date we are increasing our annual silver production guidance from 435,000 ounces to 535,000 ounces. We are maintaining our annual gold production guidance of 33,500 ounces," said president J. Scott Drever in a statement in mid October.
Stonecap Securities recently increased its price target on SilverCrest after the silver miner retired its Macquarie Bank gold hedge facility. The company said last week it paid out the remaining balance of its gold hedge facility established with Macquarie Bank in June 2009 - making it a "completely unhedged" silver and gold producer.