SilverCrest Mines Santa Elena silver and gold mine is located in Sonora, Mexico, 150 kilometres from the state capital, Hermosillo, and just 7 kilometres from the community of Banamichi.
To convert the rock in the ground to mineable ore, SilverCrest drilled a total of 23,000 metres in 136 holes.
After 2010 mining operations, the open pit portion of the Santa Elena deposit has 11.7MM oz Ag and 279K oz Au contained in 4.8 million tonnes of ore. Santa Elenas ore grades are considered high at 75.9 g/t Ag and 1.81 g/t Au in an epithermal deposit.
During Phase I of the mine life, operations at Santa Elena are expected to process 2,500 tpd with an average annual output of 800,000 ounces of silver and 30,000 ounces of gold.At recent metal prices thats an undiscounted revenue stream of $76 million annually.
Bolstered by its successes to date, SilverCrest Mines is now advancing the Santa Elena Expansion Plan which will increase profit to the company through 2019.
The Expansion Plan will commence during Phase I and includes: Phase II: The underground resource at Santa Elena, Phase III: Ore from the Cruz de Mayo satellite deposit; and Phase IV: Substantial resources from retreated leached heaps.
Phase II would begin with the construction of a Conventional CCD Mill with a capacity of 3,500 tpd.
At the same time, the company would begin construction of a 1,216 metre decline ramp in late 2011.
Presently, the underground mine development will add an additional 2.8 million tonnes of ore with a grade of 88.6 g/t silver and 1.51 g/t gold. This would net the company an additional 8 million ounces of silver, plus 136,000 ounces of gold over a 6-year mine life.
The decline ramp would allow for further exploration of the underground portion of the Santa Elena deposit in 2012. Significant potential exists here to increase resources with further drilling.
Phase III mining at Santa Elena calls for the addition of ore from the Cruz de Mayo silver and gold satellite deposit. The property is approximately 35 km from the Santa Elena property, 180 km by paved road.
Conceptually, mining at Cruz would consist of a heap leach operation on site, and/or shipping of high grade ore to the Santa Elena mill.
The property consists of two contiguous concessions with a total area of 452 ha.
The silver and gold resource at Cruz de Mayo is based on 66 drill holes completed between 2008 and 2009. Drilling is ongoing in 2011.
Present resources on the project are as follows: 6,065,000 tonnes inferred grading 66.5 g/t plus 1,141,000 tonnes grading 64.15 g/t.
At a very conservative $14.75 per ounce silver, the conceptual Cruz de Mayo open pit mine will be a traditional load and haul operation, mining 795 kt of ore at grade of 93.5 g/t silver and 0.10 g/t gold. A total of 2.2 million tonnes will be mined over a three year mine life starting in 2013 and finishing in 2016.
SilverCrest would conceptually begin open pit mining at Cruz de Mayo in 2014.
Phase IV of the Santa Elena Expansion Plan will see the company return to the Leached Heaps at the open pit by 2019.
Metallurgical work completed to date shows excellent recovery rates for both gold and silver in this process, with re-processing returning 75.7% of the total silver and 93.5% of the gold. By re-processing the heaps at the mill, SilverCrest anticipates adding further low cost metal to its coffers.
As a final part of the ongoing exploration program, SilverCrest also envisions adding potential resources from Santa Elena North. This target is located just 1 km north of the existing Santa Elena open pit.
The initial drill plan for SEN consisted of approximately 22 drill holes testing to a depth of 100 metres.
With an initial footprint measuring at least 500 metres long by 20 metres wide, Santa Elena North remains open in all directions. Results from this drill program will be released in 2011.
SilverCrest Mines Santa Elena Expansion Plan is a plan for growth.
Once executed, the expansion plan will increase average annual production by a minimum of 52% at a mine throughput of 2,500 tpd. This would produce an average of 1.6 million ounces of silver, and 39,000 ounces of gold annually. The company is considering a throughput of 3,500 tpd for a 100% increase from current production values.
The economic value of the Santa Elena Expansion Plan will contribute tremendously to the companys success. The companys April 2011 Preliminary Economic Assessment, or PEA established a significantly increased net present value for the project at $491 million (at a 5% discount rate), up from $78MM for the Santa Elena open pit alone.
With the expansion plan, the companys initial 6.5 year mine life increases to more than 10 years. Initial sales of our silver and gold have already begun to offset our operating costs, and will set the stage for early, free cash flow that will be utilized to implement SilverCrest Mines strategy for corporate growth.
