Stonecap Securities analyst Christos Doulis left his outperform rating and $3.55 price target on SilverCrest Mines(CVE:SVL) intact Thursday, after the company released yesterday its first quarter operating results from the Santa Elena mine in Mexico.
"While quarterly production was slightly below our estimates, the accelerated removal of waste material in the quarter should lead to strong production over the balance of 2013 and allow SilverCrest to meet its guidance," the analyst wrote in the research note released this morning.
Silver production in the quarter of 153,000 ounces came in just short of record production in the fourth quarter of 154,000 ounces.
Gold production of 7,225 ounces was down from 7,831 ounces in the previous quarter.
Output in the latest period was impacted by the acceleration of waste removal, which led to a lower amount of ore being processed, partially offset by increased grades and recoveries.
SilverCrest said it chose to accelerate waste removal ahead of the hotter summer months when equipment availability and efficiencies have historically declined.
The company's plan this year is to complete the contruction of a new 3,000 tonne per day mill facility, on schedule for the first quarter of 2014 at its Santa Elena mine, where it is looking to double production.
Management backed its full year guidance of 625,000 ounces silver and 33,000 ounces of gold, with Stonecap Securities also maintaining its estimates for 628,000 ounces of silver and 33,000 ounces of gold.
Doulis took note of the fact that the Santa Elena expansion remains on budget with scheduled mill start up in January. As of March 31, 40 per cent of the budgeted 2013 capital of $65 million had been spent or committed.
An updated resource and reserve estimate at the mine is expected in May.
The company is also rapidly advancing the delineation of a large polymetallic deposit at La Joya, where late last month it filed an NI 43-101 compliant technical report for the resource update.
Shares in SilverCrest were trading up more than 3.8 per cent Thursday, at $2.17 on the TSX Venture Exchange.
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