About 30,000 tonnes of coarse ore from SilverCrest Mines‘ (SVL-V) Santa Elena open pit heap leach silver-gold mine in Sonora state, Mexico, has been stockpiled near its three-stage crusher, which is now going through the final adjustments before it will be ready for operation.
The first blast at the Santa Elena pit was on May 1 and the company expects to reach commercial production by the fourth quarter of this year with the first metal pour by this summer.
SilverCrest expects the 2,500 tonne per day operation will produce about 35,000 oz. gold and 600,000 oz. silver per year over an eight-year mine life at cash costs of US$375 per gold equivalent oz.
SilverCrest began construction of the $20-million project in October 2009. At this point, the first heap leach pad is finished and is now being prepared for initial ore loading. The company expects this leach pad, about 71,500 sq. metres in size, will accommodate the first three years of mining.
Earthworks and concrete foundations for the production facilities are also done and the company expects to begin installing the gold and silver recovery system in the Merrill Crow plant soon.
An on-site lab that’s also being built will be ready for use in a few weeks time and will help the company have a quick turnaround time for mine samples and exploration assays.
The Santa Elena open pit has proven and probable reserves of 6.5 million tonnes grading 56.7 grams silver per tonne and 1.61 grams gold for a total of 11.9 million oz. and 340,000 oz. gold.
There are also indicated resources of 1.8 million tonnes grading 75 grams silver and 1.32 grams gold for 4.3 million oz. silver and 76,000 oz. gold, plus inferred resources of 2.3 million tonnes grading 104.1 grams silver and 1.67 grams gold per tonne for 7.6 million oz. silver and 122,000 oz gold.
The indicated and inferred resources are located outside of the planned open pit area.
SilverCrest was able to finance part of the project by selling an advance purchase of 20% of Santa Elena gold to Sandstorm Resources for US$12.2 million plus 3.5 million Standstorm shares. Sandstorm will also pay an ongoing per oz. payment equal to the lesser of US$350 per oz. gold and the prevailing market price (currently just above US$1,200 per oz.).
The rest of the Santa Elena project was funded through a US$12.5 million loan through Macquarie Bank.
SilverCrest shares were trading up 6¢ today at $1.03 apiece on a trading volume of 41,000 shares.
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