Vancouver-based SilverCrest Mines (CVE:SVL)(AMEX:SVLC)(NYSE MKT:SVLC) unveiled Tuesday results of more drilling at its Santa Elena mine in Sonora, Mexico, which was designed to convert resources at the project into reserves.
The company said 79 of a planned 100 holes have been completed so far to recategorize indicated and inferred resources to probable reserves, as well as to expand current underground resources.
So far, according to SilverCrest, the program has been successful and will help with resource confirmation and conversion, the results of which will be included in the upcoming prefeasibility study for the Santa Elena expansion project.
Precious metal grades in the series of holes announced today ranged from 0.22 to 4.92 grams per tonne (g/t) gold, and between 28.0 to 277.4 g/t silver. Mineralized intervals ranged from 1 to 38.9 metres.
The most notable intercepts were 30.7 metres grading 1.61 g/t gold and 169.6 g/t silver in hole SE 12-54, and 16 metres at 2.15 g/t gold and 166.9 g/t silver in hole SERC-12-36.
The main mineralized zone at the Santa Elena deposit remains open along strike and at depth. The company has drilled two holes as part of a 15-hole program designed to potentially expand resources along strike to the east and to depth, with assay results still pending.
Three drills are currently on site to complete the entire program by the end of 2012. Revised Santa Elena resources and reserves, along with the results of a pre-feasibility study for the expansion plan are expected in the first quarter of next year.
The Vancouver-based company said last month that profit and revenues increased in its third quarter, with record silver production allowing it to raise its annual forecast for the year.
Earnings were boosted by higher silver sales, and an exchange gain on a stronger Canadian dollar, partially offset by a derivative impact as well as income and a deferred tax expense.
Cash flow from its Santa Elena operations in Mexico, a key metric in the industry, more than doubled to $10.2 million, or 11 cents per share, up from $5.03 million, or 6 cents per share, in the year-earlier period.
Revenues rose 11 per cent to $16.7 million. SilverCrest sold 57 per cent more silver, at 152,088 ounces, in the latest period, while gold sold also grew 4 per cent, to 7,923 ounces.
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, while exploration programs are advancing the definition of the large polymetallic deposit at the La Joya property in Durango State.
Last week, the silver producer unveiled more results from the phase II drilling at its La Joya property, which the company said extended the main mineralized trend beyond the current resource area.
Currently, La Joya is estimated to have an inferred resource of 101.9 million ounces silver equivalent. But the company said the target size, based on the current geological model, drilling and sampling from the phase II program, suggests the possibility of resources that may be 50 to 100 per cent greater than the current estimate.