Stonecap Securities has increased its target price to $3.90 from $3.75 on SilverCrest Mines (CVE:SVL) after the junior producer posted "strong" first-quarter earnings.
The capital markets firm retained its "Outperform" rating on SilverCrest.
SilverCrest said for the three months ended March 31, cash flow from
operations reached $12.2 million in the first quarter of 2012, or $0.14
per share, on revenue of $19.6 million.
Net profit amounted to
$6.3 million, up from a loss of $2.8 million a year earlier, or a profit
of 7 cents per share from a loss of 4 cents in the first quarter of
In a research note, Stonecap Securities analyst Christos
Doulis said: "The company continues to build cash, which will help fund
the plan to double annual production to around 4 million ounces silver
equivalent at Santa Elena by 2014."
Silver production in the
first quarter was a record 135,000 ounces versus Stonecap's own forecast
of 116,000 ounces and gold production was 9,405 ounces versus
Stonecap's estimate of 8,900 ounces.
The company's management reiterated its full-year guidance of 435,000
ounces of silver and 33,000 ounces of gold. This prompted Stonecap to
increase its estimate to 477,000 ounces silver from 464,000 ounces and
maintain its forecast of 36,000 ounces gold.
costs came in at $7 per silver equivalent ounce versus Stonecap's own
estimate of $10 per ounce on 139,000 ounces silver and 9,788 ounces of
gold sold in the quarter.
"SilverCrest delivered a quarter well
beyond our initial expectations, and as such we have increased our 2012
CFPS estimate for the company, resulting in an increase in our target
price for the company’s shares," Stonecap's Doulis wrote.
flagship property is the 100 percent-owned Santa Elena Mine, which is
located 150 km northeast of Hermosillo, near Banamichi in the State of
Santa Elena is a high-grade, epithermal gold and silver producer, with an estimated life of mine cash cost of US$8 per ounce of
anticipates that the 2,500 tonnes per day facility should recover
approximately 4,805,000 ounces of silver and 179,000 ounces of gold over
the 6.5 year life of the open pit phase of the Santa Elena Mine.