SilverCrest increases bought deal financing

Precious metals producer SilverCrest Mines (SVL-V, SVLC-N, SVLC-X) has expanded its bought financing to $30 million from $26 million and will use the proceeds to both eliminate the remainder of its gold hedge book and beef up its working capital.

The shares will be priced at $2.55 apiece by a syndicate of underwriters including Dundee Securities and Canaccord Genuity.

SilverCrest is tackling a three-year expansion that it says could double metal production at its flagship Santa Elena mine in Mexico’s Sonora state.

SilverCrest expects that Santa Elena’s current 2,500-tonne-per-day heap-leach facility should recover about 4.81 million oz. silver and 179,000 oz. gold over the six and a half year open-pit phase of its mine life, but plans to boost capacity to 3,000-3,500 tonnes per day with a conventional CCD processing plant to process mill feed from the open pit as well as from future underground production. It has already started building a decline ramp.

The high-grade, epithermal gold-silver mine, 150 km northeast of Hermosillo, began commercial production in July 2011 and produced 377,000 oz. silver and 27,000 oz. gold last year. In the first half of 2012 the mine churned out 274,378 oz. silver and 17,989 oz. gold for a total of 1.26 million silver equivalent oz.

SilverCrest’s 100%-owned Santa Elena is described as a high calcium, low-sulfidation type of deposit with replacements, stockworks and hydrothermal breccias similar to other high level, low-sulfidation deposits in Mexico, Chile, Nevada and Arizona.

In addition to Santa Elena, SilverCrest is busy in Durango state defining a large polymetallic deposit at its La Joya property, where inferred resources within the Phase I area are estimated to host 57.9 million tonnes grading 28 grams silver per tonne for 51.3 million oz. of contained silver, 0.18 gram gold per tonne for 333,400 oz. gold and 0.21% copper for 270.3 million lb. copper.

It is also advancing its Cruz de Mayo project, about 20 km from Santa Elena, or 170 km northeast of Hermosillo. Cruz de Mayo has indicated resources of 1.14 million tonnes grading 64.2 grams silver for 2.35 million oz. of contained silver and 0.06 gram gold for 2,300 oz. gold. Inferred resources currently stand at 6.17 million tonnes at 66.5 grams silver for  12.97 million oz. contained silver and 0.07 gram gold for 13,300 oz. gold.

At the time of writing the Vancouver-based junior was trading at $2.63 in Toronto within a 52-week range of $1.25-3.17.


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