SilverCrest Mines (TSXV: SVL; NYSE-MKT: SVLC) has revised upwards its full-year 2013 silver guidance after producing more silver than planned in the second quarter from its flagship Santa Elena silver-gold mine in Sonora, Mexico.
The junior reported production of 194,022 oz. silver and 7,463 oz. gold, marking a quarter-over-quarter increase of 26% and 3%. Silver-equivalent output was up 20% to 665,684 oz.
The increased production helped bring silver output for the first half of the year to 347,503 oz., or 11% above schedule. Gold production for the first six months was 14,688 oz., off by 11%.
But based on Santa Elena’s strong silver performance, SilverCrest has lifted its annual silver production guidance by 8% to 675,000 oz., from 625,000 oz. It has kept its 2013 gold forecast at 33,000 oz.
The junior expects to maintain 2013 cash costs at or below US$8.50 per equivalent oz. silver, explaining it is reducing costs where possible while expanding the Santa Elena mill capacity to 3,000 tonnes per day from the current 2,500 tonnes per day. The expanded mill is slated to start in January 2014, assuming work continues on track and within budget. The junior notes 65% of the budgeted 2013 capital cost of US$65 million for the expansion has been committed to date.
The company’s CEO Scott Drever said he was pleased with the mine’s performance and anticipates higher production during the second half, as SilverCrest mines higher grades at the Santa Elena pit.
Highlights from the June quarter include SilverCrest crushing 307,091 tonnes, or 18% more than the previous quarter. It also saw silver and gold ounces delivered to the leach pad jump by 25% and 13% to 651,570 oz. silver and 14,610 oz. gold, compared to the first quarter of 2013. Over the same period, average silver grade for the ore loaded onto the pad increased by 6% to 65.99 grams, while the average gold grade fell 5% to 1.48 grams.
Despite the drop in gold grade, gold sales were in line with the previous quarter. SilverCrest sold 7,375 oz. gold, while silver ounces sold increased 15% to 181,398 oz.
The junior reported waste-to-ore ratio of 2.52, which matches the mine plan.
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