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SilverCrest Mines Live @ PDAC
By Resource Intelligence · April 13, 2011 · 10:50 am · Leave a Comment
Resource Intelligence Interviews Silvercrest Mines’ Eric Fier about its producing gold & silver mine
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RI: Eric, you just put out a press release on your La Joya project, but let’s start with Santa Elena and what is going on there right now.
EF: We are in ramp-up mode and will probably be another month or two before we get into production. Things are looking really good and the crusher is performing at expectations now. The mining is going quite well and processing is excellent. It’s an open pit, heap leach and low cost operation.
RI: Your original mine life was six and a half years and now it’s doubled?
EF: With the expansion plan we’re looking at 11 or 12 years now. You do the open pit and you get that running smooth and we’ve approached it from the standpoint of low capital risk up front and then you build off your success. Then you need to bring in a mill, which is a much higher capital cost and to bring in a mill and all the infrastructure required for that it’s going to be somewhere between $60 to $80 million.
RI: How will you finance that?
EF: We’ll look at part of that debt and equity—possibly 60% debt financing and 40% equity financing. There is a lot of money out there right now with the commodities market. People are willing to write you cheques today to move that mill into place. Our targets right now are to double our production rate from 35,000 ounces of gold and 600,000 ounces of silver, so that is what we need in the expansion plan to double it by 2014.
RI: What would your peak production be in terms of ounces of gold and silver?
EF: On the gold side we’re targeting 60,000 to 70,000 ounces and on the silver side it will be 1.2 to 1.5 million ounces per year.
RI: You should have underground operations in place by when?
EF: We’re looking at breaking ground on driving the decline for the underground this year. It will take about a year to get that decline down to the bottom. One of the great things about Santa Elena is that our current resource underground is about 250,000 ounces of gold equivalent and we can easily double that.
RI: You’ve done a great job of fast tracking this and we’ve watched you take this from exploration to production in just a few years. Now you’ve got the La Joya project, what do you know now?
EF: This morning we put out results for 10 holes and it was about what we expected and what we were shooting for. Average grades run anywhere from 90 to 100 grams of silver and 0.5 to 1% copper and 0.5 g/t gold. If you throw that altogether, you’ve got a pretty decent ore body that is developing at La Joya.
RI: Right now the grades sound like an open pit potential?
EF: There is underground and open pit potential. The key to La Joya is establishing continuity and we’re starting to do that now. This thing is about 2.5 kilometers long and we’ve only got the first 10 holes and tested maybe 500 metres of that.
RI: What is your target as you move along those 2.5 kilometers?
EF: Our minimum target is about 50,000,000 ounces of silver and probably the equivalent in copper with a gold credit.
RI: Does that add up to a project similar in size to Santa Elena?
EF: It would actually be larger. There is also potential there for a deeper copper/moly porphyry system and we’ll be testing that very soon.
RI: Take us through the next steps.
EF: We have a lot more drilling to do. At Santa Elena we are kicking off a prefeasibility study for the expansion plan and we will be doing that over the next 12 months. That requires a lot more drilling and a lot more metallurgical work. We are also looking for a mill.
RI: How are you financing exploration and how much are you planning on spending on the two projects?
EF: Right now we have about $2.5 million dedicated to the prefeasibility expansion plan at the Santa Elena mine and just over half of that is in exploration work. At La Joya we’ve got about $750,000 and we’ve spent about $400,000 of that in Phase 1—with success.
