SilverCrest Mines (TSE:SVL)(NYSE MKT:SVLC) provided Wednesday an update on the company’s new 3,000 tonnes per day (tpd) milling facility that began commissioning last month, saying that continuous production at the rate of 3,000 tpd will be achieved by the start of August.
The precious metals miner’s redevelopment program is aimed at doubling annual silver production rates at its flagship Santa Elena mine in Mexico, with expectations that the new 3,000 tonnes per day facility should recover an average annual rate of 1.5 million ounces of silver and 32,800 ounces of gold over the current reserve.
“The mill start-up in May was a significant milestone in the development and responsible growth of the company,” said president and COO N. Eric Fier.
“We are confident that our projected early August completion of commissioning of the mill and ancillary facilities will be on schedule.”
The $100 million expansion plan at Santa Elena has been three years in the making, and is now nearly complete. After reaching nameplate capacity at the plant, SilverCrest plans to begin testing up to 4,000 tpd, with no additional capital requirements expected.
It currently has $7.5 million left to be spent this year on the expansion project, after budgeting a total of $26 million for 2014. The remaining capital will be spent mostly on underground equipment and development, SilverCrest said Wednesday, anticipated to complete early in the third quarter, when free cash flow from operations will be generated for the remainder of the year.
The company is now continuing underground development at Santa Elena, with more than 4,500 metres completed to date on ramping, ventilation and ore development, according to the Canadian miner’s statement released this morning.
Blending of underground ore and pad ore for processing is slated to begin in July, SilverCrest said.
As open pit heap leach production phases out, and the mill facility ramps up to full production, the company said it expects second quarter production will be lower than the first quarter of this year. It is still expecting to produce between 3.3 to 3.6 million silver equivalent ounces for 2014 as significantly higher metal recoveries and full production through the mill will be seen in the second half of the year.
