Resource World Magazine

MINI NG Rapid development plans build growth expectations for SilverCrest Mines in Mexico by Mike Kachanovsky It is almost redundant to point out that SilverCrest Mines Inc. [SVL-TSXV] has accelerated its growth plans. The company has demonstrated that it puts a priority on advancing quickly through all phases of mine development since its inception. The decision to focus all of its operations in Mexico is part of that story. Mexico is an ideal jurisdiction for an emerging junior mining company to set up shop. The country has a long mining tradition and a formal policy in place to enable projects to advance very quickly through to permitting, development and construction. One other factor that provides a big advantage for a junior producer is the lower costs associated with mine operations in Mexico versus other areas in North America. There is an abundance of highly prospective geology distributed through much of the northern half of Mexico, most of which is underexplored. SilverCrest completed its first acquisition in 2005, to gain control of the Santa Elena Project, comprising approximately 3,500 hectares located in Sonora State. Like many properties that have been acquired by junior mining companies during the current cycle, the property included a formerly producing mine that had been abandoned after the Mexican revolution in 1912. SilverCrest then set about completing exploration work to establish a large resource of silver and gold mineralization at Santa Elena to support a development plan for an open pit mine and processing plant. The timing could not have been better as metals prices continued a strong rising trend and funding was secured to 30 www.resourceworld.com Mining underway at the Santa Elena open pit. Photo courtesy of SilverCrest Mines Inc. move the project through the development curve to establish production. Santa Elena commenced commercial operations in July 2011. The mine has been able to operate efficiently and profitably, currently producing at an average rate of 3,000 tonnes per day from an oxide zone that can be processed using lower cost heap leach technology. The operation has achieved a recovery efficiency of about 67% for the gold, and 37% for the silver reserve during a 300-day leach cycle. The transition from explorer to producing miner can be a challenging phase but SilverCrest management has proven that it has the skill set to make it look easy. Cash flow has been rolling in and the company decided to proceed to the next phase of its growth plan. A second core project has been established at is La Joya property, located in Durango State. Management aspires to duplicate the success they achieved at Santa Elena, and completed an aggressive exploration program to delineate resources, with the plan for a rapid development phase to build a second mining complex. The drilling work at La Joya appears to be paying off. Impressive intervals of silver-copper-gold mineralization have been reported and an inferred resource estimated at 27.9 million tonnes was outlined using a cutoff grade of 60 g/t silver EQ. This generated a resource of about 100 million silver equivalent ounces that is being studied for a potential starter pit in a development plan. This resource is subject to expansion as there are further potential resource zones that could be upgraded to the deposit with further exploration work. A Preliminary Economic Assessment is currently underway for La Joya with the study expected by late summer. SilverCrest has entered into a purchase agreement to secure 100% ownership of the property, and will complete the purchase plan for the property this year. A total of $3.75 million is due to complete the acquisition, half of which shall be paid in shares. Meanwhile, the company has already embarked on its next phase of growth at its flagship Santa Elena Mine. As mining continues at the open pit portion of the deposit, a $65 million expansion plan is now underway to access new resource zones and extend the mine life through underground mine development. In addition, an upgrade for the processing plant will be completed through the construction of a conventional mill facility that has a total processing capacity of 3,000 tpd. This would be an ambitious undertaking for any junior miner, but in tandem with the project development underway at La Joya, it is a commitment to rapidly JUNE 2013

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