Stonecap Securities analyst Christos Doulis left his outperform rating and $3.90 price target on SilverCrest Mines(CVE:SVL) intact, after the silver miner released drill results from its Santa Elena operations in Mexico, where the company is looking to double production.
The company said in a statement on Monday that 132 holes have now been completed in the current drilling program, with the plan of expanding resources and reserves at the mine.
The headline hole, SE-13-126, intersected 21.6 metres grading 1.46 grams per tonne (g/t) gold and 169.1 g/t silver, including 0.6 metres grading 5.2 g/t gold and 1,840 g/t silver.
The main mineralized zone has been extended by around 300 metres beyond the current resource boundary, the company said, and two sub-parallel zones, El Cholugo and El Cholugo Dos, have also been identified.
From the El Cholugo Zone, drill hole SE-13-131 intersected 5.1 metres grading 4.29 g/t gold and 157.4 g/t silver.
"While the drill results continue to be encouraging, the pre-feasibility study for the Santa Elena expansion remains the next major catalyst for the company," notes Doulis in his morning note on Tuesday.
Three drills continue to turn on the site, with a resource and reserve update expected in late April or early May - to be followed by the pre-feasibility study for the expansion plan.
Late last month, the silver miner filed an NI 43-101 compliant technical report for the resource update for its La Joya property in Mexico, which included results from preliminary metallurgical work. In January, the company announced that at a global case cut off grade of 15 grams per tonne of silver equivalent, inferred resources at La Joya stand at 198.6 million ounces, almost 95% higher than the 101.9 million ounces at the same cut off grade previously.
La Joya is one of SilverCrest's Mexican properties, the others being the Cruz de Mayo, and its flagship Santa Elena Mine, which is located 150 kilometres northeast of Hermosillo, in the State of Sonora, Mexico.
SilverCrest is currently changing hands at $2.28 in Toronto on Tuesday.
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