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Friday, 6 September 2013
SilverCrest Mines gets boosted price target from Stonecap Securities as mine life assumption increased
SilverCrest Mines (CVE:SVL) had its price target increased at Stonecap Securities on Friday, after positive drill results announced yesterday continued to highlight the exploration upside at the silver miner's Santa Elena project in Mexico, according to analyst Christos Doulis.
Doulis, who praised SilverCrest as a "strong operator" in the precious metals sector and upped his mine life assumptions for the project, maintained his sector perform rating on the Canadian company, but increased his price target to $2.50 from $2.20 previously.
SilverCrest announced results Thursday from 47 drill holes at Santa Elena, with highlights including 15 metres of 4.03 grams per tonne (g/t) gold and 243.2 g/t silver, including 2 metres grading 17.5 g/t gold and 664 g/t silver.
The current underground reserve grade of the Santa Elena mine is 1.57 g/t gold and 108.1 g/t silver, meaning the high grade intercepts could help increase the overall grade of the project, Doulis noted.
"These positive drill results continue to highlight the exploration upside at Santa Elena and we have increased our assumed mine life by just over a year to 2022," wrote Doulis in the note emailed to clients this morning. "For investors bullish on the precious metals complex we believe SilverCrest is a strong operator that offers good exposure to both silver and gold."
Of the 47 drill holes announced Thursday, only three holes failed to intersect significant mineralization, with the results expanding the recently discovered El Cholugo and El Cholugo Dos zones, and outlining a new zone dubbed "Tortuga".
As a result, Stonecap's net asset value estimate for the Santa Elena mine increased to $1.84 per share from $1.54 per share, previously.
Last month, SilverCrest reported a record quarter for silver sales, and delivered cash operating costs well below management guidance.