Shares of SilverCrest Mines (CVE:SVL)(NYSE MKT:SVLC) rose on Wednesday after the company announced that though first quarter pure silver production at its Santa Elena mine in Mexico was about steady with the last quarter, it expects positive effects from ongoing improvements to be seen in the latter half of the year.
Its stock rose 2 cents to $2.07 late Wednesday morning.
For the first quarter, the company, which is in the midst of an expansion plan at its flagship mine, produced 556,667 silver equivalent ounces, down 5 per cent from 588,948 ounces in the fourth quarter of 2012. Silver equivalent ounces sold declined 11 per cent sequentially.
This was on the back of flat silver production of 153,481 ounces, compared to 153,863 ounces in the fourth quarter, and gold production that declined 8 per cent to 7,225 ounces.
Ore tonnes crushed decreased 18 per cent from the last quarter to 252,830 tonnes due to focus on removing more waste tonnes.
In the first quarter, the company chose to accelerate waste removal ahead of the hotter summer months when equipment availability and efficiencies have historically declined, it said.
The silver miner believes this the stage for a significant reduction in strip ratios and more ore tonnes processed, with higher metal production expected in the second half of 2013.
Indeed, it maintained its corporate guidance of 625,000 ounces of silver and 33,000 ounces of gold for 2013.
"Our decision to accelerate waste removal is consistent with our overall mine plan for 2013 operations," said president J. Scott Drever in the statement on Wednesday.
"We are comfortable that as the ultimate strip ratio declines and the ore grades in the pit continue to increase we will meet our production and cost projections for the year," he said adding that he expects positive results of improvements in these two metrics to become apparent in the second half of the year.
Average silver ore grade loaded on the pad in the first quarter increased 4 per cent from the previous quarter to 62.09 grams per tonne (g/t), while average gold grades rose 9 per cent to 1.54 g/t. The waste/ore ratio increased 39 per cent to 4.27, due to planned increased waste stripping.
The company's plan this year is to complete the contruction of a new 3,000 tonne per day mill facility on schedule for the first quarter of 2014 at its Santa Elena mine, where it is looking to double production.
As at the end of the first quarter, around 40 per cent of the budgeted 2013 capital cost of US$65 million had been spent or committed, the company said. The plan is still on budget, it added, with mill start-up expected in January of next year.
The Santa Elena mine has a higher grade open pit that is currently being mined, and an underground resource that is being developed, remaining open with exploration upside.
Drilling to better define and expand resources and reserves at the site is completed, with revised numbers expected in May. First quarter financial results are anticipated on May 15.
The company is also rapidly advancing the delineation of a large polymetallic deposit at La Joya, where late last month it filed an NI 43-101 compliant technical report for the resource update. In January, the company announced that at a global case cut off grade of 15 grams per tonne of silver equivalent, inferred resources at La Joya stand at 198.6 million ounces, almost 95% higher than the 101.9 million ounces at the same cut off grade previously.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.