SilverCrest Mines posts strong results from Santa Elena Mine

The company posted earnings for the three months ended June 30 of $790,429, or $0.01 per share, on revenue of $8.56 million. To date, the company has generated metal sales of $13.4 million, of which $4.8 million was capitalized in the three months to March 31, 2011.

Santa Elena is located 150km northeast of Hermosillo, in the state of Sonora, and is a high-grade epithermal gold and silver producer, with an estimated life of mine cash cost of US$8 per ounce of silver equivalent.

In a press release, SilverCrest's President J. Scott Drever said: "Achieving commercial production in June was an important and exciting milestone for the company but more importantly we have been able to generate significant positive cash flow and earnings early in the development of the Santa Elena Mine."

Drever added: "By achieving a cash operating cost of $8.27 per ounce of silver equivalent at this early stage we have met our initial expectations but we will continue to optimize our operations so as to reduce this cost."

He added that With a cash balance of $33.3 million and increasing operational cash flows, the company should be able to achieve both its financial and growth objectives.

Earlier this year, SilverCrest successfully raised $30 million through a bought deal financing with the proceeds being used to start the Santa Elena expansion project, as well as for the exploration and development of other properties in Mexico.

SilverCrest said that 249,000 tonnes of ore were mined, crushed and delivered to the pad at the Santa Elena Mine. During the quarter, 74,678 ounces of silver and 5,476 ounces of gold were produced as ore, with a significant amount of silver and gold still in solution for processing and recovery.

The company said that it sold 70,326 ounces of silver and 4,300 ounces of gold during the quarter.

Looking ahead, the company said as part of its plan to double production over the next three years, an estimated 45 hole infill drill program comprising approximately 5,000 metres is set to commence in the third quarter at Cruz de Mayo, a satellite property of Santa Elena Mine.

Engineering and selection of contractors is underway for commencement of an underground decline at the Santa Elena Mine in the fourth quarter which upon completion, will provide access to further explore, potentially expand and develop the current silver and gold resources below the planned ultimate pit.

The La Joya Project Phase 1, 26 diamond drill hole program, comprising approximately 5,500 metres, has just been completed, SilverCrest said.

The company added that work is underway to prepare an initial 43-101 compliant Technical Report with a resource estimation. Based on success of Phase I, the company said that a Phase II, 10,000 metre drill program consisting of approximately 50 drill holes, is planned to start in the fourth quarter of 2011.

Shares of Vancouver-headquartered SilverCrest closed Monday's session at $1.59 on Toronto's junior market.