SilverCrest Mines (CVE:SVL)(OTCQX:STVZF) announced Wednesday that third quarter silver production from its Santa Elena Mine in Sonora, Mexico grew 43 percent sequentially, while gold production improved 61 percent.
For the three months ending September 30, the company produced 106,636 ounces of silver, up from 74,678 ounces in the second quarter, and 8,805 ounces of gold versus 5,476 ounces of gold in the prior quarter.
The company said the mine is expected to produce over 400,000 ounces of silver and 26,000 ounce of gold in 2011, after declaring commercial production on April 1 of this year.
"We are certainly pleased with the consistent progress being made at the operational level at the Santa Elena Mine. All aspects of the operations are at design capacities and are functioning as expected including the crusher," said president J. Scott Drever.
"This has been reflected in the steady increase in the overall performance statistics and more specifically in the increased number of ounces of silver and gold poured on site and sold out of the refinery. The improvements in production numbers are expected to be reflected in our Q3 financial results to be released towards the end of November."
The first full year of production of the mine in 2012 is anticipated to yield 478,000 ounces of silver and 32,000 ounces of gold. From 2013 through 2016, silver production is expected to average approximately 921,000 ounces per year and gold production is expected to average approximately 29,000 ounces per year, the company added.
SilverCrest also sold 96,631 ounces of silver in the third quarter, and 224,346 ounces year to date, and 7,627 ounces of gold in the latest three month period, and 14,260 ounces of gold so far this year.
In the third quarter, the company crushed an average of 2,755 tonnes of ore per day, above the daily designed throughput of 2,500 tonnes, with an average silver ore grade of 48.47 grams per tonne (g/t) and an average gold ore grade of 2.2 g/t. This compares with 2,737 tonnes of ore crushed per day in the second quarter, with average grades of 44.09 g/t silver and 1.91 g/t gold.
Estimated silver recovery to date is approximately 22 percent and estimated gold recovery is 41 percent, consistent with budgeted numbers of 24 percent for silver and 41 percent for gold during the ramp up phase, SilverCrest said.
All mining has now transitioned to the Main Zone, the company said, with expected life-of-mine total metal recoveries of between 35 to 40 percent for silver, and 65 to 70 percent for gold. During the third quarter, high grade ore mined from the Main Zone averaged approximately 53.83 g/t silver and 1.99 g/t gold.
"Our strong cash position of $32.4 million and substantial cash flow assures that we can proceed with our 3 year expansion plan to double production at Santa Elena and to implement the company's overall strategy for corporate growth," concluded Drever.
Vancouver-based SilverCrest's Santa Elena Mine is located 150 kilometres northeast of Hermosillo, near Banamichi in the State of Sonora, Mexico.
The mine is a high-grade, epithermal gold and silver producer, with an estimated life of mine cash cost of US$8 per ounce of silver equivalent. SilverCrest anticipates that the 2,500 tonnes per day facility should recover approximately 4.8 million ounces of silver and 179,000 ounces of gold over the 6.5 year life of the open pit mine.