In an drilling update at its Santa Elena Mine in Sonora, Mexico,SilverCrest Mines (CVE:SVL) (NYSEMKT:SVLC) reported today an additional 47 drill holes that had not yet been included in a recent technical report.
That brings the total drill core and RVC holes completed to 181, with the other 134 already included in the resource estimate. SilverCrest said the results show greater expansion of the Santa Elena deposit, "which is still open latterly and to depth."
Several of these reported holes identified additional high-grade intercepts, the company said, and expanded the recently discovered El Cholugo and El Cholugo Dos Zones. Additionally, SilverCrest discovered a new zone, called Tortuga.
The update prompted Jennings Capital to reiterate its "buy" recommendation and 12-month price target of $3.25.
“This delineation drill program at Santa Elena was immensely successful. With this program, we drilled the known portion of the deposit at approximately 35 metre centres," said president and chief operating officer Eric Fier in a statement. "The recently announced results of the revised underground reserve and resource estimations have extended the current mine life to a minimum of 8 years."
The Vancouver-based explorer said it has intercepted the main mineralized zone underground and extracted approximately 8,000 tonnes of ore from the 625 metre level.
The company anticipates a "significant increase in metals production starting in 2014" after construction of the mill is complete.
"The drill holes include ongoing good results to the east and at depth of the current resource envelope, with headline hole 152 intercepting 15 metres of 4.0 g/t Au and 243 g/t Ag," Jennings analyst Kwong-Mun Achong Low wrote.
"By our back-of-the-envelope estimates, the new discovery Tortuga could have over 2.5 Moz AgEq. The weighted average intercept for the 23 holes drilled into the new zone is 4.0m of 2.2 g/t Au and 152 g/t Ag. Notably, the best results were toward depth; where mineralization potential remains open," Low wrote.
Low said El Cholugo and El Chologo Dos could add "easy" ounces to the mine plan because of their accessibility from the planned underground development nearby.
Last month, SilverCrest reported a record quarter for silver sales, and delivered cash operating costs well below management guidance.
Net earnings for the three months ended June 30 came in at $2.86 million for the miner, compared to $9.53 million for the same period a year ago.
Revenue dropped 18% to $13.0 million from the year ago figure of $16 million.
Shares on Thursday slipped 0.5% to $2.12 after spiking to an intraday high of $2.18.
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