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speedybure (< 20)

Part 3 of 5 - Speedy;s Top Silver Picks 2012

Recs

23

February 20, 2012 – Comments (8) | RELATED TICKERS: AG , ISVLF


Silvercrest mines -  This has been an excellent story for investors of more than 1 year, yet the story is just now unfoding. Silvercrest is no one trick pony with it;s only currently operating asset in the St. Elena open pit. It has began a multi-phase phase-expansion, outling below.  

·         2012 Phase 1 – Increase the current run rate of 1,650 tpd to 2,500 tpd, increasing annual AgEq production from 1.6m Oz. to 2.6m Oz Production for 2012 forecast at 2m AgEq and 2.6m in 2013. 

·         Phase 2-5 – Installation of a CDC processing facility, increasing mill throughput 52% [construct 3,000 - 3,500 tpd conventional mill], increasing production to 5m Ageq in 2014 and 5.75m in 2015. [Will begin feeding new mill from open pit and U/G late 2013/early 2014]. 

·         Phase 2 – Development of an underground mine [beggining early 2013] 

 With approximately 30m of cash in the bank, and incremental production growth from 2012-2016, it is likely everything can be funded from OCF. Sandstorm gold does own a 20% stream on St. Elena and has the option to receive 20% of the U/G production BUT will be responsible for 20% of the capital requirements. 

While not a low cash-cost producer, expect LOM cash costs are reasonable at $9.50/Oz. On a valuation basis Silvercrest is one of the cheapest out there, especially given its 100m oz resource at its La Joya mine. If metal prices cotninue to move higher, there is a very realistic chance, La Joya can be brought online in the next 3-5 years without having to turn to the market for funding. While its best to remain conservative it terms of appraisal at this point in time, my personal take is that come 2016 - Silvercrest becomes a 7-8m oz producer and 10m oz by 2017.

Trading for a mere 200m market cap while assuming, Silvercrest's valuation for Just St.Elena alone using a 10% discount rate $32.50 Ag and $1600 Au, a $6  2-3 price target is very reasonable. Investors should begin a position here and hope it can pull back below $2, though it looks unlikely given the momentum gained after >400% increase in resources. 

 

 

 

8 Comments – Post Your Own

#1) On February 20, 2012 at 2:47 PM, XMFSinchiruna (27.56) wrote:

Excellent! I'm loving this! You picked up both of the stocks that I was forced to exclude from my list due to their mcap, and that would otherwise have made my top 5. Silvercrest is now comfortably above $200m, but when my top 10 came out it was just under the mark.

That resource upgrade was a thing of beauty, and since it came out during the Vancouver event, I was able to walk right over to their booth and congratulate them in person within minutes of its release.

Agree wholheartedly this is one of the great developing stories in the silver space, and I look forward to increasing the size of my stake as I'm able.

Loving this series! Thanks for taking the fime to write these up! With your permission, I'm eager to bring your recommendations to a wider audience as a feature article (though I still don't think I can mention Impact due to mcap). 

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#2) On February 20, 2012 at 3:51 PM, speedybure (< 20) wrote:

Go ahead, no need to ask

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#3) On February 21, 2012 at 5:29 PM, Speed03 (< 20) wrote:

VANCOUVER, B.C. February 21, 2012 – SilverCrest Mines Inc. (the “Company”) is pleased to announce it has filed the
NI43‐101 Technical Report and initial resource estimation for its La Joya Property in Durango, Mexico. Inferred Resources
previously announced in a news release dated January 5, 2012 are estimated at 57.9 million tonnes grading 28 gpt silver,
0.18 gpt gold, and 0.21% copper. These initial resources contain approximately 51.3 million ounces of silver, 333,400
ounces of gold (16.7 million ounce of Ag Eq) and 270.3 million pounds of copper (33.9 million ounces Ag Eq) for a total
of 101.9 million ounces silver equivalent* (Ag Eq) using a cutoff grade of 15 gpt Ag Eq. Resource estimates using higher
grade cutoffs are also shown in the table below. The Report can be reviewed in its entirety in the Company’s file at
www.sedar.com

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#4) On February 21, 2012 at 10:25 PM, charliedawgg (< 20) wrote:

This isn't really a silver question, but I noticed that one of your picks was BRD. What do you make of their current share price "stagnation"? Thanxx for your input.

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#5) On February 22, 2012 at 12:55 PM, speedybure (< 20) wrote:

BRD has had problems ramping up its U/G mine a blackfox as well as grade control. The company has recently reported an operations update for 2012, which shows U/G grades have more than doubled to what has been forecasted. I expect BRD to remain stagnant for another 2 months - 3 months and start to move up after this. Production should increase and cash costs decrease. It wouldn't be a bad time to buy more under $1. 

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#6) On February 22, 2012 at 9:04 PM, charliedawgg (< 20) wrote:

Yeah, I read that report yesterday and was somewhat encouraged; I do recognize that there is a certain degree of inherent "spin" in such reports, so I appreciate any input from you and Sinch. Here's hoping that all of us BRDers have a productive 2nd quarter. Thanxx again for your speedy response. Cheers.

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#7) On February 23, 2012 at 7:10 AM, skypilot2005 (< 20) wrote:

http://www.snl.com/Cache/1500039590.PDF?D=&O=PDF&IID=4288058&Y=&T=&FID=1500039590

2/21/12

Brigus Gold Provides Operations Update

Sky

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#8) On February 23, 2012 at 7:14 AM, skypilot2005 (< 20) wrote:

Try this one  :) :

http://www.snl.com/Cache/1500039590.PDF?D=&O=PDF&IID=4288058&Y=&T=&FID=1500039590

http://www.brigusgold.com/

Sky

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