SilverCrest Metals (TSX: SIL; NYSE: SILV) has discovered a new high-grade zone outside the resource area at its Las Chispas project in Sonora, Mexico.
The discovery hole — 19-118 — returned 9 metres grading 44.30 grams gold per tonne and 4,551.3 grams silver per tonne for 7,873 grams silver-equivalent per tonne, starting from 304 metres downhole. Another hole, 19-123, cut 6 metres grading 3.54 grams gold and 615.5 grams silver, or 881 grams silver-equivalent.
The high-grade footprint of Area 118 is estimated to be 300 metres along strike by 125 metres in height and includes two adjacent and intersecting veins, Las Chispas and Giovanni. The company says in-fill drilling is required to fully understand the estimated widths and grades of the new zone.
An updated resource estimate that would include mineralization from Area 118 is expected in the second quarter of next year, along with the results of a feasibility study.
The company has 17 core drills at Las Chispas, one of which is drilling from underground.
Eric Fier, the company’s CEO, says the team is “particularly excited” that discovery hole 19-118 was drilled in the Las Chispas area which, until now, has been a second priority after the high-grade mineralization delineated in the Babicanora area. The hole also surpassed the previous record intercept at Babicanora of 9 metres grading 6,336 grams silver equivalent.
The current drill program is focused on the Las Chispas and Giovanni veins to expand high-grade mineralization by stepping out from historic underground workings along the down-plunging mineralized trend towards intact and previously unmined areas.
Las Chispas is 220 km northeast of Hermosillo.
Ryan Thompson, an analyst with BMO Capital Markets, says the company’s aggressive exploration campaign continues to pay dividends with the discovery of the new high-grade zone, which “should contribute ounces to the reserve/resource inventory, and could continue to push the lower-grade areas of the property further back in the mine-life.”
Thompson has an ‘outperform’ rating on the stock and a 12-month target price of $9.50 per share.
At press time, SilverCrest shares were trading at $7.58 apiece with a 52-week range of $2.93 to $8.73. The company has 92 million shares outstanding for a $699-million market capitalization.