Silvercrest continues to beef up Santa Elena

Three important bits of information came out of Silvercrest Mines (SVL-T, SVLC-X) latest drill results from its Santa Elena project in Mexico.

First there was the extension of the El Cholugo zone. Second the company identified a new sub-parallel zone dubbed El Cholugo Dos, and thirdly it intercepted bonanza grades of silver along the Main Mineralized trend.

The mineralized zone at El Cholugo was extended roughly 50 metres to 200 metres by 100 metres and is 5 to 10 metres thick. The zone remains open to the west and at depth. Highlights from the El Cholugo included 7.3 metres grading 2.73 grams gold and 357.9 grams silver, including 1.2 metres grading 3.9 grams gold and 1,239.5 grams silver.

At the newly discovered El Cholugo Dos zone the drill bit returned a highlight intercept of 1.5 metres grading 4.83 grams gold and 72.3 grams silver.

Highlights from the Main Mineralized trend included hole 117 that intercepted 1 metre grading 1.5 grams gold and 1,320 grams silver and Hole 119 that intercepting 1.9 metres grading 2.34 grams gold and 1,281.9 grams silver.

Those results help lengthen the Main Mineralized trend another 300 metres beyond the current resource boundary.

Silvercrest reached commercial production at Santa Elena in July of 2011 and the open-pit mine produced 2.37 million silver-equivalent oz. in 2012 and is expected to have life of mine cash costs of US$8 per silver equivalent ounce.

The company plans on doing an underground expansion to compliment a new mill onsite. The mill is expected to be up and running in early 2014. A prefeasibility study examining the underground expansion is due out during the first quarter of 2013.

Santa Elena sits 150-km northeast of Hermosillo in Sonora Mexico and currently has open pit probable reserves of 3.45 million tonne grading 1.96 grams gold and 87.3 grams silver for 21.69 million silver equivalent ounces.

The site also hosts underground indicated resources of 991,000 tonne grading 1.83 grams gold and 109.1 grams silver and underground inferred resources of 1.879 million tonnes grading 1.53 grams gold and 86.9 grams silver.

The company expects results from the next series of holes soon and new of those results will be followed by an updated resource and reserve estimate. A total of 111 of a planned 114 holes have already been drilled and its underground decline has gone beyond 1,200 metres.

The work is all part of Silvercrest’s expansion plan that aims to double production at the mine by 2014. Silvercrest is debt-free and had $44 million in cash at the end of 2012.

In Toronto on Feb. 2 the company’s shares were off 4% or 10 cents to $2.40 on 180,000 shares traded.