TSX: SIL | NYSE American: SILV
VANCOUVER, BC, Feb. 2, 2021 /PRNewswire/ - SilverCrest
Metals Inc. ("SilverCrest" or the "Company") is pleased to announce
positive results from a Feasibility Study (the "Feasibility Study")
for the Las Chispas Project ("Las Chispas" or the "Project") in
Sonora, Mexico. Details of the
Feasibility Study, including an updated Mineral Resource Estimate
and an initial Mineral Reserve Estimate, are provided in a
technical report filed under the Company's SEDAR profile entitled,
"NI 43-101 Technical Report & Feasibility Study on the Las
Chispas Project" with an effective date of January 4, 2021 (the "Technical Report"). The
Technical Report has been prepared by Ausenco Engineering Canada
Inc ("Ausenco") with the assistance of several other independent
engineering companies and consultants.
Highlights:
All dollar ($) figures are presented in US dollars unless
otherwise stated. Base Case metal prices used in this
analysis are $1,500 per gold
("Au") ounce ("oz") and $19.00 per
silver ("Ag") oz. These prices are based on long-term consensus
average prices. A silver equivalent ("AgEq")1 ratio of
86.9:1 (Au:Ag) applies throughout this news release to Mineral
Resources and Reserves, production and all-in sustaining cost
("AISC") per oz. Net free cash flow and AISC are non-IFRS measures.
Refer to the Non-IFRS measures section of this news release.
- Robust Economics – The Feasibility Study considers a
1,250 tonne-per-day ("tpd") operation, with an initial mine life of
8.5 years. On an after-tax basis, Las Chispas generates a Base Case
NPV(5%) of $486.3 million ("M"), IRR
of 52%, and a payback period of 1.0 year. Using spot prices on the
effective date of the Technical Report ($1,946/oz Au and $27.36/oz Ag) the after-tax NPV(5%) is
$802.5 M, IRR is 74% and payback
period is 0.7 year.
- High-Grade Updated Mineral Resource and Initial Reserve
Estimate – Initial Proven and Probable Reserves (3.35 M tonnes, grading 4.81 gpt Au and 461 gpt
Ag, or 879 gpt AgEq) total 94.7 Moz AgEq (Table 3). These estimates
place Las Chispas amongst the highest-grade primary silver projects
globally2. The mine plan excludes Inferred Resources
(1.2 M tonnes grading 745 gpt AgEq
totaling 29.7 M oz AgEq), which
includes the recently discovered high-grade Babi Vista Vein Splay
("BAVS") (211,400 tonnes grading 2,039 gpt AgEq totaling 13.9 Moz
AgEq). Expansion and infill drilling for BAVS is underway and
targeted to be included in a revised Mineral Resource and Reserve
update in 2022.
- Enhanced Near Term Production Profile – The Feasibility
Study outlines average annual production of 12.4 Moz AgEq from 2023
through 2029, with net free cash flow beginning in 2023. Production
will benefit from improved metallurgical recoveries for Au and Ag
of 97.6% and 94.3%, respectively. This compares to 94.4% for Au and
89.9% for Ag reported in the Preliminary Economic Assessment
("PEA"), titled, "Technical Report and Mineral Resource Estimate
for the Las Chispas Property, Sonora,
Mexico", effective date of May 15,
2019, as amended July 19,
2019. Commissioning of the processing plant is targeted for
Q2 2022 with ramp-up through H2 2022. It is anticipated that
SilverCrest will have accumulated 8 months (~300,000 tonnes) of
mineralized material on surface when the processing plant is
expected to reach nameplate capacity of 1,250 tpd, providing
flexibility in the early stages of production.
- Lowest Quartile AISC – Average project-level life of
mine ("LOM") AISC of $7.07/oz AgEq,
and $6.68/oz AgEq over seven (7) full
years of production, positions Las Chispas amongst the lowest
quartile AISC globally3.
- Strong Capital Position, Formal Construction Decision –
With the completion of the Feasibility Study, SilverCrest's Board
of Directors has formally approved construction of the Project. The
Company currently has $125 M in cash
as of January 31, 2021 and
$90 M currently available under its
credit facility. Orders for critical long lead items have been
placed and all permits required to begin process plant construction
are in hand.
- Opportunities to Grow and Optimize – Given that Las
Chispas has been advanced through the Feasibility Study stage
within only five (5) years of its discovery, numerous opportunities
remain for growth and optimization. The most significant
opportunities are the potential to expand and convert Mineral
Resources, particularly for BAVS, Granaditas, Babi Vista and
Babicanora Norte veins, and the El Muerto Zone, all of which are
close to the planned underground development. Other notable
opportunities include optimization of the LOM grade profile and
potential acceleration of the mine ramp-up.
________________________
|
1 AgEq is based on an Au:Ag ratio of
86.9:1 calculated using $1,410/oz Au and $16.60/oz Ag, with
average metallurgical recoveries of 96% Au and 94%
Ag.
|
2 Based on top 10 producing projects
by 2019 silver production with public disclosure on a primary
silver basis from S&P Market Intelligence.
|
3 Based on data from S&P Market
Intelligence, comparing to forecasted 2020 AISC for silver
producers using the following metal prices: gold: US$1,500/oz,
silver: US$19.00/oz, lead: US$0.83/lb and zinc:
US$1.03/lb).
|
Pierre Beaudoin, COO,
remarked, "The Las Chispas Feasibility Study defines a project
with robust economics and potential for further improvements during
operations. With our EPC Contract and underground development
contracts in place, initial construction is already underway and is
expected to ramp up through Q1, 2021. Our on-site team has been
integral in advancing the study and operating successfully under
challenging conditions. The recent achievement of completing more
than 9,000 metres of underground mine development while surpassing
one million man-hours without a Lost-Time Injury is a testament to
our work force diligence to get the job done and continued
commitment towards a strong health and safety culture. We thank the
team for the outstanding efforts during a challenging
year."
N. Eric Fier, CPG, P.Eng and CEO
commented: "We are thrilled to have completed a robust Feasibility
Study within five years of drilling the first hole at Las Chispas.
The Feasibility Study confirms what we have believed for a while,
that Las Chispas is economic as a stand-alone operation. It is
important to note that the Feasibility Study is just a snapshot in
time. We are already working hard to increase our high-grade
reserves while simultaneously constructing the mine and process
plant. We are excited about the extensive opportunities that remain
to grow and optimize Las Chispas. We are greatly appreciative of
our employees, partners in the community, contractors and our
shareholders, who together have supported us to achieve this
important milestone safely, quickly and in a very capital efficient
manner. While there is a lot of hard work ahead of us, we
look forward to making the shift to production and cash flow which
we expect will finance our continued growth."
Further details on the Feasibility Study are presented
below.
Table 1: Feasibility Study Overview
Las Chispas
Feasibility Study Summary (Base Case)
|
Throughput
(tpd)
|
1,250
|
Mine Life
(years)
|
8.5
|
Reserves Proven &
Probable (kt)
|
3,351
|
|
Average Diluted Au
Grade (gpt)
|
4.81
|
Average Diluted Ag
Grade (gpt)
|
461
|
Average Diluted AgEq
Grade (gpt)
|
879
|
|
Contained Au
koz
|
518.1
|
Contained Ag
koz
|
49,679
|
Contained AgEq
koz
|
94,704
|
|
Average Au
Metallurgical Recovery
|
97.6%
|
Average Ag
Metallurgical Recovery
|
94.3%
|
|
Payable Au koz
(LOM)
|
502.8
|
Payable Ag koz
(LOM)
|
46,559
|
Total AgEq
koz
|
90,271
|
|
Average Annual
Production (LOM)
|
Au koz
|
56.0
|
Ag koz
|
5,181
|
AgEq koz
|
10,044
|
|
Average Annual
Production (2023-2029)
|
Au koz
|
69.0
|
Ag koz
|
6,360
|
AgEq(1)
koz
|
12,354
|
|
Mining Cost
($/t)
|
71.40
|
Process Cost
($/t)
|
31.69
|
G&A Cost
($/t)
|
15.40
|
Total Operating Cost
($/t)
|
118.49
|
Initial Capital Cost
($ M)
|
137.7
|
LOM Sustaining
Capital Cost ($ M)
|
123.9
|
Closure costs ($
M)
|
3.4
|
|
AISC ($/oz AgEq)
LOM
|
$7.07
|
AISC ($/oz AgEq)
2023-2029
|
$6.68
|
|
Au Price
($/oz)
|
$1,500
|
Silver Price
($/oz)
|
$19.00
|
Post-Tax
IRR
|
52%
|
Post-Tax NPV (5%, $
M)
|
$486.3
|
Undiscounted LOM net
free cash flow ($ M)
|
$656.4
|
Payback period
(years)
|
1.0
|
The Feasibility Study presents a range of metal pricing
scenarios on a post-tax basis to evaluate the economics of the
Project in both upside and downside commodity price situations
(Table 2). As illustrated in the following table, the Project
remains robust even at lower commodity prices. Additional
sensitivities are presented in the Technical Report. The Project
economics are most sensitive to precious metal prices.
Table 2: Sensitivity Analysis
|
Downside
Case
(PEA
Prices)
|
Base
Case
|
Upside
Case
(Spot Price -
Effective Date)
|
Metal
Prices
|
Gold
($/oz)
|
$1,269
|
$1,500
|
$1,946
|
Silver
($/oz)
|
$16.68
|
$19.00
|
$27.36
|
Economics
|
Post-Tax NPV (5%, $
M)
|
$370.4
|
$486.3
|
$802.5
|
Post-Tax
IRR
|
42%
|
52%
|
74%
|
Undiscounted LOM Free
Cash Flow ($ M)
|
$510.7
|
$656.4
|
$1,054
|
Payback period in
years
|
1.2
|
1.0
|
0.7
|
Several aspects of the Feasibility Study are similar to the PEA
with respect to: processed tonnes per year, mine life, contained
ounces, processing costs, G&A costs and closure costs. Using
Feasibility Study Base Case metal prices, the AISC, undiscounted
LOM net free cash flow and payback period are similar to those in
the PEA. The most significant differences are increased mineral
resources, increased mineable grades, decreased mineable tonnes,
increased recoveries, more payable ounces, higher mining dilution,
and higher mining and capital costs. See further discussion below.
Mineral Resource and Reserve Estimates
The Mineral Resource Estimates were prepared by Yungang Wu, P.
Geo., and Eugene Puritch, P.Eng.,
from P&E Mining Consultants Inc. ("P&E") and are provided
in Table 3. Estimates were completed for potential
underground mining of in-situ vein deposits at the Las Chispas and
Babicanora Areas and for surface extraction of stockpiles from
historical and current operations. All drilling, surveying and
assay databases were provided by SilverCrest including data up to
the cut-off date of October 16,
2020. Full details for the Mineral Resource Estimate can be
found in the Technical Report.
Table 3: Mineral Resource Estimate
Classification
|
Tonnes
|
Grade
|
Contained
Metal
|
(k)
|
Au
(gpt)
|
Ag
(gpt)
|
AgEq
(gpt)
|
Au
(koz)
|
Ag
(koz)
|
AgEq
(koz)
|
Babicanora
Area
|
M+I
|
2,214.5
|
7.35
|
681
|
1,319
|
523.2
|
48,471
|
93,939
|
Las Chispas
Area
|
Indicated
|
445.1
|
4.20
|
548
|
913
|
60.1
|
7,845
|
13,065
|
Total Undiluted
Veins
|
M+I
|
2,659.6
|
6.82
|
659
|
1,251
|
583.3
|
56,316
|
107,004
|
Historic
Stockpiles
|
Indicated
|
164.2
|
1.23
|
108
|
215
|
6.5
|
572
|
1,135
|
Total Veins
+
Stockpiles
|
M+I
|
2,823.8
|
6.50
|
627
|
1,191
|
589.8
|
56,888
|
108,139
|
Babicanora
Area
|
Inferred
|
861.6
|
5.47
|
409
|
884
|
151.6
|
11,325
|
24,496
|
Las Chispas
Area
|
Inferred
|
378.4
|
1.80
|
272
|
428
|
21.9
|
3,308
|
5,209
|
Total Undiluted
Veins
|
Inferred
|
1,240.0
|
4.35
|
367
|
745
|
173.4
|
14,634
|
29,705
|
|
Notes:
|
•
|
Mineral Resources
that are not Mineral Reserves do not have demonstrated economic
viability.
|
•
|
The estimate of
Mineral Resources may be materially affected by environmental,
permitting, legal, title, taxation, socio-political, marketing, or
other relevant issues.
|
•
|
The Inferred Mineral
Resource in this estimate has a lower level of confidence than that
applied to an Indicated Mineral Resource and must not be converted
to a Mineral Reserve. It can be reasonably expected that the
majority of the Inferred Mineral Resource could be upgraded to an
Indicated Mineral Resource with continued exploration.
|
•
|
The Mineral Resources
in the Report were estimated using the 2019 CIM Estimation of
Mineral Resources & Mineral Reserves Best Practice Guidelines
and 2014 CIM Definition Standards for Mineral Resources &
Mineral Reserves.
|
•
|
Historical mined
areas were removed from the wireframes and block model.
|
•
|
AgEq is based on gold
to silver ratio of 86.9:1 calculated using US$1,410/oz Au and
US$16.60/oz Ag, with average metallurgical recoveries of 96% Au and
94% Ag using information available at the effective date of October
16, 2020.
|
•
|
Mineral Resources are
inclusive of the Mineral Reserves.
|
•
|
All numbers are
rounded.
|
The initial Mineral Reserve estimate was prepared by
Carl Michaud, P.Eng., Underground
Mining Engineer of G Mining Services Inc. ("GMS"), dated of
January 4, 2021.
Table 4: Mineral Reserve Estimate
Classification
|
Tonnes
|
Grade
|
Contained
Metal
|
(k)
|
Au
(gpt)
|
Ag
(gpt)
|
AgEq
(gpt)
|
Au
(koz)
|
Ag
(Moz)
|
AgEq
(Moz)
|
Total
|
Proven
|
336.5
|
6.21
|
552
|
1,091
|
67.1
|
6.0
|
11.8
|
Probable
|
3,014.7
|
4.65
|
451
|
855
|
451.0
|
43.7
|
82.9
|
Proven +
Probable
|
3,351.2
|
4.81
|
461
|
879
|
518.1
|
49.7
|
94.7
|
|
|
Notes:
|
•
|
The Mineral Reserve
is estimated using the 2019 CIM Estimation of Mineral Resources
& Mineral Reserves Best Practice Guidelines and 2014 CIM
Definition Standards for Mineral Resources & Mineral
Reserves.
|
•
|
The Mineral Reserve
is estimated with a variable COG which was calculated by vein width
and economic and operating parameters.
|
•
|
A government gold
royalty of 0.5% is included in the Mineral Reserve
estimates.
|
•
|
The Mineral Reserve
is estimated with a mining recovery of 95%.
|
•
|
The Mineral Reserve
presented includes both internal and external dilution. The
external dilution included a mining dilution of 0.5 m width on
the hanging wall and footwall for the long hole mining method and a
0.2 m width on the hanging wall and footwall for the
cut-and-fill and resue mining methods. Backfill dilution is also
included and represents an average of 7% for the long hole mining
method and an average of 10% for cut-and-fill and resue mining
methods.
|
•
|
A minimum mining
width of 1.5 m was used for the long hole and cut-and-fill
mining methods. A minimum mining width of 0.5 m was used for
the resue mining method.
|
•
|
The economic
viability of the Mineral Reserve has been demonstrated.
|
•
|
AgEq is based on gold
to silver ratio of 86.9:1 calculated using US$1,410/oz Au and
US$16.60/oz Ag, with average metallurgical recoveries of 96% Au and
94% Ag.
|
•
|
Any discrepancies in
the totals are due to rounding effects; rounding followed the
recommendations in the 2019 CIM Mineral Resources & Mineral
Reserves Best Practice Guidelines.
|
Production Profile
Underground mining will be completed using four (4) conventional
mining methods (43% long hole, 18% cut-and-fill uppers, 27%
cut-and-fill breasting, and 12% resue). Overall, underground mine
dilution has been estimated to be 52%, mine recovery to be 95%,
with, on average, 23 active working faces. Underground development
and mining rates are scheduled to ramp-up at a measured pace
through 2022 and 2023, with process plant feed during this period
sourced from both underground stopes and surface stockpiles (Figure
2). It is anticipated that SilverCrest will have accumulated
approximately 300,000 tonnes of mineralized material on surface
when the processing plant is expected to reach nameplate capacity,
providing flexibility in the early stages of production. This
ramp-up profile lowers the risk of start-up and minimizes
sustaining capital investment at the outset of the production.
There is potential for these rates to be accelerated with further
optimization work.
The Feasibility Study outlines an average production profile of
12.4 Moz AgEq over the seven (7) full years of mine life, with 2022
and 2030 as partial years of production due to ramp-up and ounces
produced at the end of the mine life. Average annual production
over the full LOM is 10.0 Moz AgEq. Further optimization may
increase grade and ounces in the earlier years of the LOM
schedule.
Figure 3: Annual Production Profile
Processing and Recovery
Since completing the PEA, additional metallurgical testing and
process design were concluded. This work highlighted the need for
modifications to the process flowsheet to address the presence of
higher clay content and higher-grade mineralized materials. The key
changes to the circuit are the inclusion of a SAG mill, flotation
and corresponding split leach circuits, and larger thickeners,
clarifiers and filters. This work resulted in a more flexible
process plant and enhanced LOM metallurgical recoveries. LOM
estimated metallurgical recoveries post ramp-up are provided below
(see details in Table 5).
Table 5: Metallurgical Recoveries
Metal
|
Metallurgical
Recovery
|
Gold
|
97.6%
|
Silver
|
94.3%
|
Initial and Sustaining Capital Cost Estimates
The Feasibility Study estimates initial capital requirements of
$137.7 M and sustaining capital of
$123.9 M over the life of the mine
(see details in Table 6). Excluded from the initial capital
estimate is $25.8 M of sunk capital
that was spent prior to January 1,
2021, and relates to initial earthworks, Phase 1 of the
construction camp, initial EPC milestone payment, and long-lead
orders. Also excluded from these estimates are $3.4 M in closure costs at the end of
production.
The initial capital has increased from the PEA mainly due to the
following: COVID-19 related costs, underground mining
infrastructures, process plant modifications to accommodate higher
grades and clay content, and the inclusion of a power line to
replace diesel-generated power.
Sustaining capital is substantially higher than that in the PEA
due to a combination of upward revisions to the amount of
underground development required based on longer veins requiring
more access and the applicable unit rate. This represents the most
significant change from the PEA in terms of capital
expenditures.
Table 6: Capital Cost Estimates
Area
|
Initial
Capital
($
M)
|
Sustaining
Capital
($
M)
|
Mine
|
27.7
|
120.9
|
Process
Plant
|
44.9
|
1.4
|
Tailings
Management
|
3.1
|
0.4
|
Infrastructure
|
20.6
|
1.3
|
Owners
Costs
|
18.2
|
-
|
Contingency
|
23.3
|
-
|
Project
Total
|
137.7
|
123.9
|
Closure
Costs
|
|
3.4
|
Note: Numbers
presented are rounded and columns may not add to the
sums.
|
As announced in the Company's January 4,
2021 news release, one of SilverCrest's Mexican subsidiaries
has entered into a fixed price Engineering, Procurement and
Construction contract ("EPC Contract") with Ausenco and one of its
affiliates for construction of the process plant for a lump
sum turnkey price of $76.5 M with
work expected to begin at the Project site in February 2021. The $76.5M price includes sunk capital and a
proportionate share of Contingency listed in Table 6. The contract
was executed with approximately 60% of detailed engineering being
completed and procurement of long lead items having started in
Q4 2020.
Operating Costs
LOM operating costs for the Project are estimated to average
$118.49 per tonne milled. When using
the Base Case commodity price assumptions, the average LOM in-situ
contained metal value is approximately $515 per tonne milled. During the start-up
period, processing and general and administrative ("G&A") costs
per tonne are higher until the process plant throughput ramps up to
design capacity. The Feasibility Study is based on contractor
underground mining, which has an estimated LOM cost of $71.40 per tonne milled. LOM processing costs are
estimated at $31.69 per tonne milled
and G&A costs are estimated at $15.40 per tonne milled.
Table 7: Operating Cost Breakdown
Operating
Cost
|
|
LOM
|
2023-2029
|
|
($ M)
|
($/oz
AgEq)
|
($ M)
|
($/oz
AgEq)
|
Mining
|
239.3
|
2.65
|
214.2
|
2.48
|
Processing
|
106.2
|
1.18
|
96.3
|
1.12
|
G&A
|
51.6
|
0.57
|
45.8
|
0.53
|
Total Operating
Costs
|
397.1
|
4.40
|
356.4
|
4.13
|
All-In Sustaining Costs per Ounce of Silver
Equivalent
AISC are estimated to be $7.07/oz
AgEq produced, based on LOM payable production of 90.3 Moz AgEq.
During full years of production, AISC is expected to average
$6.68/oz AgEq produced. The
break-down of the components of the AISC for the Project are
provided in Table 8.
Table 8: AISC Breakdown
AISC (Base
Case)
|
|
LOM
|
2023-2029
|
|
($ M)
|
($/oz
AgEq)
|
($ M)
|
($/oz
AgEq)
|
Operating
Costs
|
397.1
|
4.40
|
356.4
|
4.13
|
Refining
Costs
|
28.8
|
0.32
|
27.5
|
0.32
|
Government
Royalties
|
88.6
|
0.98
|
79.7
|
0.92
|
Sustaining
Capital
|
123.9
|
1.37
|
113.1
|
1.31
|
Total
AISC
|
638.3
|
7.07
|
576.6
|
6.68
|
Note that the above calculation does not include corporate
G&A costs or exploration expenditures for the Project.
Opportunities
Given the speed at which Las Chispas has been advanced through
the Feasibility Study stage, numerous opportunities remain for
optimization and growth. The most significant opportunities are as
follows:
- Expansion of Mineral Resources and Conversion to Mineral
Reserves - These areas will be advanced as part of the ongoing
exploration program, which will include underground in-vein
development. Priorities will be Babi Vista Vein Splay, Babi Vista
Vein, Babicanora Norte Vein, El Muerto Zone, and Granaditas 1 and 2
veins.
- Testing New Targets – As of October 16, 2020, 45 veins have been identified,
but only 21 have had sufficient drilling to support at least an
Inferred Mineral Resource estimate. SilverCrest intends to target
Mineral Resource additions from these remaining veins and evaluate
the significant potential to identify additional veins through
continued surface exploration and drilling programs. Surface
exploration and initial drill-testing has identified an additional
estimated 30 km of potential vein strike length to explore. The
Mineral Resource currently represents approximately 18 km of vein
strike length.
- Mine Optimization – Several of the priority exploration
opportunities in 2021 are within or close to the proposed footprint
of underground development. With successful exploration and
potential Mineral Reserve conversion, these opportunities could
allow for optimization of LOM, LOM grade and ramp-up profiles.
- Process Plant Capacity – The Feasibility Study assumes a
processing throughput of 1,250 tpd based on the highest clay
samples encountered during metallurgical testing. If it is
determined during operation that the clay content is lower than
assumed, daily throughput could be increased. There is also an
opportunity to complete a low capital cost expansion of the plant
to 1,750 tpd, if reserve tonnage and mining rates allow. This would
include the addition of a ball mill, pebble crusher and additional
flotation capacity, with the CCD circuit already sized for
additional capacity. The 2021 budget will include engineering work
to support a capital cost estimate for the expansion.
The suggested budget in the Feasibility Study for work related
to these opportunities is $39.2
M.
The Company intends to carry out an exploration and mine
optimization program in 2021 to address these opportunities which
will contribute to an updated Mineral Resource and Reserve Estimate
currently planned for 2022.
Risks
De-risking of Las Chispas has been a top priority for the
Company including significant work to finish the Feasibility Study,
completing over 9,000 m of
underground development including in-vein drifting, accumulating
significant surface stockpiles of mineralized material, reaching
60% of detailed engineering, and installing an isolated
construction camp to limit the risk of COVID-19 during
construction. Remaining risks include:
- COVID-19 – The Company has made a substantial investment
to address COVID-19 risks. This includes the installation and
operation of an isolated camp, quarantining and testing prior to
site access, random testing, and the implementation of strict
protocols. In addition, the company has established a COVID-19
taskforce mandated to monitor results and adapt protocols. Despite
these efforts, an outbreak at site remains possible and could
disrupt construction.
- Mineral Resource Estimates – Las Chispas is a
high-grade precious metal deposit and inherently has a nugget
effect which could cause overestimation of high-grade
mineralization when completing Mineral Resource estimation. Hard
boundary wireframes were used in estimation which helps restrict
potential overestimation of grades; however, wireframes may be
biased with respect to the representative volume, and subsequent
estimated tonnage and metal content.
- Mineral Reserve Estimates and Mine
Plan – The main risks that can affect the Mineral
Reserves are the decrease in mining recovery and the increase in
mining dilution due to the narrow veins that make up the deposit.
To mitigate this risk, the mine design includes four mining methods
and the ramp-up will take advantage of the stockpile levels and be
gradually increased to design level.
- Metallurgical Test work and Recovery Plan – There is a
risk that high volumes of clay content materials may cause reduced
capacity through the tailings filters and greater moisture in the
dry-stack tailings facility. Planned mitigations include a
duty-standby design of the filters in the plant, and potential
reconfiguration of the dry stacking areas in the Filtered Tailings
Storage Facility (FTSF). Further characterization and management of
clay before production is also being planned as it also represents
both a mitigation measure and an opportunity.
About the Feasibility Study
Ausenco managed the Feasibility Study with several other
engineering companies and consultants contributing to sections of
the study. The following QPs contributed to the study:
- Ausenco – Mineral processing, recovery methods, infrastructure,
environmental, consolidated cost estimates and economic
analysis
-
- Robin Kalanchey, P. Eng.
- Scott Weston, P. Geo.
- P&E – Geology and Mineral Resources
-
- William Stone, P.Geo.
- Eugene Puritch, P.Eng.
- David Burga, P. Geo.
- Jarita Barry, P.Geo.
- Yungang Wu, P.Geo.
- Andrew J. Turner, P. Geol.
- G-Mining Services – Mineral Reserves, mining, mine capital and
operating costs
-
- Carl Michaud, ING., P. Eng.
- Wood Environment & Infrastructure Solutions, Inc. –
Tailings
-
- Humberto Preciado, PhD,
P.E.
- Hydro-Ressources Inc. – Hydrology and Hydrogeology
-
- Michael Verreault, P.Eng.
- Rockland Ltd. – Geotechnical
-
This news release has been reviewed and approved by N.
Eric Fier, CPG, P.Eng, CEO of
SilverCrest and a Qualified Person as defined by National
Instrument 43-101 – Standards of Disclosure for Mineral Projects
("NI 43-101"). The technical information in this news release has
also been reviewed and approved by the following independent
Qualified Persons:
- Robin Kalanchey, P. Eng.
- Eugene Puritch, P.Eng.
- Carl Michaud, ING., MBA
SilverCrest will be hosting a conference call on February 3, 2021 at 5:30
am PST/8:30 am EST to discuss
the results of the Feasibility Study. An accompanying presentation
will be uploaded to the Company's website
(www.silvercrestmetals.com/investors/presentation_factsheet/).
Access details for the call as follows:
- North American Toll-Free dial-in: 1-888-664-6392
- Webcast Access:
https://produceredition.webcasts.com/starthere.jsp?ei=1424977&tp_key=8fd6c92776
- Encore North American Toll-Free Replay: 1-888-390-0541 Code:
511265#
About Silvercrest Metals Inc.
SilverCrest is a Canadian precious metals exploration and
development company headquartered in Vancouver, BC, that is focused on new
discoveries, value-added acquisitions and targeting production in
Mexico's historic precious metal
districts. The Company's current focus is on the high-grade,
historic Las Chispas mining district in Sonora, Mexico. The Las Chispas Project
consists of 28 mineral concessions, of which the Company has 100%
ownership of where all the resources are located. SilverCrest is
the first company to successfully drill-test the historic Las
Chispas Property resulting in numerous high-grade precious metal
discoveries. The Company is led by a proven management team in all
aspects of the precious metal mining sector, including taking
projects through discovery, finance, on time and on budget
construction, and production.
FORWARD-LOOKING
STATEMENTS
This news release
contains "forward-looking statements" and "forward-looking
information" (collectively "forward-looking statements") within the
meaning of applicable Canadian and United
States securities legislation. These include, without
limitation, statements with respect to: the economics and project
parameters presented in the Feasibility Study, including IRR, AISC,
NPV, and other costs and economic information; mineral resource and
mineral reserve estimates contained in the Technical Report;
possible events, conditions or financial performance that is based
on assumptions about future economic conditions and courses of
action; the strategic plans, timing and expectations for the
Company's exploration, development and construction activities at
the Las Chispas Project. Such forward looking statements or
information are based on a number of assumptions, which may prove
to be incorrect. Assumptions have been made regarding, among other
things: impact of the COVID-19 pandemic; the reliability of
mineralization estimates, mining and development costs; the
conditions in general economic and financial markets; availability
of skilled labour; timing and amount of expenditures related to
rehabilitation and drilling programs; and effects of regulation by
governmental agencies. The actual results could differ materially
from those anticipated in these forward-looking statements as a
result of risk factors including: uncertainty as to the impact and
duration of the COVID-19 pandemic; the timing and content of work
programs; results of exploration and development activities; the
interpretation of drilling results and other geological data;
receipt, maintenance and security of permits and mineral property
titles; environmental and other regulatory risks; project cost
overruns or unanticipated costs and expenses; and general market
and industry conditions. Forward-looking statements are based on
the expectations and opinions of the Company's management on the
date the statements are made. The assumptions used in the
preparation of such statements, although considered reasonable at
the time of preparation, may prove to be imprecise and, as such,
readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date the
statements were made. The Company undertakes no obligation to
update or revise any forward-looking statements included in this
news release if these beliefs, estimates and opinions or other
circumstances should change, except as otherwise required by
applicable law
CAUTIONARY NOTE TO US INVESTORS
This news
release includes Mineral Reserves and Mineral Resources
classification terms that comply with reporting standards in
Canada and the Mineral Reserves
and the Mineral Resources estimates are made in accordance with NI
43-101. NI 43-101 is a rule developed by the Canadian Securities
Administrators that establishes standards for all public disclosure
an issuer makes of scientific and technical information concerning
mineral projects. These standards differ significantly from the
requirements of the SEC applicable to domestic United States reporting companies.
Consequently, Mineral Reserves and Mineral Resources information
included in this news release is not comparable to similar
information that would generally be disclosed by domestic US
reporting companies subject to the reporting and disclosure
requirements of the SEC. Accordingly, information concerning
mineral deposits set forth herein may not be comparable with
information made public by companies that report in accordance with
US standards.
NON-IFRS MEASURES
SilverCrest has included
certain non-IFRS performance measures as detailed below. In the
mining industry, these are common performance measures but may not
be comparable to similar measures presented by other issuers. The
Company believes that, in addition to conventional measures
prepared in accordance with IFRS, certain investors use this
information to evaluate the Company's performance and ability to
generate cash flow. Accordingly, it is intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS.
All-in Sustaining Cash Costs per Ounce of AgEq – The Company
defines AISC once in production as the sum of operating costs (as
defined and calculated above), royalty expenses, sustaining
capital, corporate expenses and reclamation cost accretion related
to current operations. Corporate expenses include general and
administrative expenses, net of transaction related costs,
severance expenses for management changes and interest income. AISC
excludes growth capital, reclamation cost accretion not related to
current operations, interest expense, debt repayment and taxes. For
the purpose of the Feasibility Study, AISC does not include
corporate G&A and exploration expenditures for the Project.
While there is no standardized meaning of the measure across the
industry, the Company's definition conforms to the all-in
sustaining cost definition as set out by the World Gold Council in
its guidance dated June 27, 2013. The World Gold Council is a
non-regulatory, non-profit organization established in 1987 whose
members include global senior mining companies. The Company
believes that this measure will be useful to external users in
assessing operating performance and the ability to generate free
cash flow from current operations.
Net Free Cash Flow – SilverCrest calculates net free cash
flow by deducting cash capital spending from net cash provided by
operating activities. The Company believes that this measure
provides valuable assistance to investors and analysts in
evaluating the Company's ability to generate cash flow after
capital investments and build the cash resources of the Company.
The most directly comparable measure prepared in accordance with
IFRS is net cash provided by operating activities less net cash
used in investing activities.
N. Eric Fier, CPG,
P.Eng
Chief Executive Officer
SilverCrest
Metals Inc.
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SOURCE SilverCrest Metals Inc.