SilverCrest Mines (CVE:SVL)(NYSE MKT:SVLC) says it has reported yet another discovery at its Santa Elena mine in Mexico and more high grade drilling results, sending shares higher Tuesday.
Shares of the silver producer rose 2 cents to $2.52 this morning in Toronto.
The news today follows the discovery last month of a high grade gold and silver zone that lies below the Main Mineralized Zone currently being mined.
So far, 111 holes of a planned 114 holes have been completed to recategorize indicated and inferred resources to probable reserves, and expand current underground resources at the mine.
The company said Tuesday the program continues to be "extremely successful" and several of the most recent holes have found additional bonanza grade intercepts, with now two new zones - El Cholugo and El Cholugo Dos - that lie below the Main Mineralized Zone.
The results from the campaign will be included in a revised resource and reserve estimate - expected this quarter - which will be used in an upcoming pre-feasibility study for the Santa Elena expansion project.
"This delineation drill program has been immensely successful," said president J. Scott Drever.
Indeed, the company has drilled the known portion of the deposit at 35 to 40 metre centres, the Main Mineralized Zone has been extended by around 300 metres beyond its current resource boundary and it has identified two new sub-parallel zones, El Cholugo and El Cholugo Dos.
"We are eagerly awaiting the results of the revised underground resource and reserve estimations that are intended to extend the mine life well beyond the existing 6.5 year life of the current open pit heap leach."
A three year expansion plan is underway to double metals production at the mine.
In the reported series of drilling Tuesday, core holes SE-13-117, SE-13-119 and GT-12-09 intercepted further bonanza grades of silver, of greater than 1,000 grams per tonne (g/t), ranging from 1.0 metre at 1.50 g/t gold and 1,320 g/t silver to 1.9 metres at 2.34 g/t gold and 1,281.9 g/t silver.
Grades ranged from 0.3 g/t gold to 27.2 g/t gold and 54.7 g/t to 1,320 g/t silver, while mineralized intervals came in between 1.7 to 25.8 metres.
The company said the El Cholugo Zone continues to expand with five new drill hole intercepts, with dimensions now around 200 metres long by 100 metres high and open to the west and to depth.
A new parallel mineralized zone, EL Cholugo Dos, was also intercepted below the El Cholugo discovery in three different holes. Dimensions of this new discovery are still not known, with further drilling expected to test this mineralization.
Around 39,000 metres have been drilled so far in the program, with results for the next series of holes to be released once compilation is complete.
Three drills are now on site, and more expansion drilling will continue this year.
SilverCrest is also advancing the definition of its large polymetallic deposit at its La Joya property in Mexico, where it late last month doubled the ounces in the resource.
The company produced 2.37 millon ounces of silver equivalent last year, and Cormark Securities said in a recent research note that it is on track to become a 5.0 millon plus producer within the next two years, with additional upside from the "rapidly expanding" La Joya project.
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