Power issues delay SilverCrest’s first metal sale from Las Chispas

SilverCrest Metals (TSX: SILV), which is in the midst of commissioning its Las Chispas gold-silver mine in Sonora state, Mexico, said reliability issues with electricity supplies have caused unspecified delays in completing its first metal from the mine.

The Canadian precious metals exploration and development company said power supplies to its operations were not “at a steady state”, but noted they should improve in the last quarter of the year, when it expects to begin selling metals from the mine.

Despite the issue, SilverCrest anticipates it will reach commercial production at the underground mine before the end of the year, as originally planned. Initially, Las Chispas was expected to generate 600 to 700 tonnes of ore per day, slightly lower than the 750 tonnes per day indicated in the feasibility study.

“Starting up a new mining operation is a dynamic period, and our team and contractors continue to navigate and address mostly typical ramp-up issues,” COO Pierre Beaudoin said in a statement.

During the first three months of commissioning, the Las Chispas processing plant has performed in-line or ahead of the design curve on all metrics, the company said. 

A total of 53,600 tonnes of material has been processed since start-up, with average throughput in August of 784 tonnes per day, up 46% from July 2022, it noted.

Located approximately 180 km northeast of the Sonora state capital of Hermosillo, the Las Chispas silver project currently has 3.4 million tonnes of proven and probable reserves grading 461 grams per tonne of silver and 4.81 grams per tonne of gold.

Only 21 of 45 known veins on the property were included in this reserve estimate, SilverCrest said.

As of Aug. 31, the Vancouver-based miner had cash and cash equivalents of $101.6 million and decided not to draw the remaining $30 million it has available under its $120 million credit facility.

SilverCrest shares were trading at $7.38 apiece as of Thursday morning in Toronto. Its equity has traded in a 52-week window of $6.65 and $12.99. The company has a market cap of $1 billion.