TSX: SIL | NYSE American: SILV
VANCOUVER, BC, April 28,
2022 /CNW/ - SilverCrest Metals Inc. ("SilverCrest"
or the "Company") is pleased to provide an update on construction
activities at the Company's Las Chispas Project ("Las Chispas" or
the "Project") located in Sonora,
Mexico. All currency amounts herein are presented in
United States Dollars, unless
otherwise stated.
Highlights
- Commissioning On Schedule for Q2, 2022 – At the end of
the first quarter of 2022 ("Q1, 2022"), overall construction
progress at Las Chispas was 95.7%. Start-up of the plant remains on
track for Q2, 2022, in line with the Feasibility Study* despite a
decline in labour availability in Q1, 2022 due to COVID-19 which
eliminated the schedule gains made in 2021.
- Capital Costs Remain on Budget – To the end of Q1, 2022,
the Company has committed $114.6
million (83.2%) of the $137.7
million Feasibility Study capital cost estimate and
$108.0 million was incurred. Of the
remaining capital budget to be incurred in Q2, 2022 ($29.7 million), 22% ($6.3
million) is related to the Ausenco** fixed price EPC
contract for process plant construction and 27% ($8.0 million) is unused contingency.
- Temporary Power Installed, Grid Power Partially Energizing
Las Chispas – SilverCrest's section of the power line was
energized in early April 2022. The
Comision Federal de Electricidad ("CFE") is responsible for the
remaining part of the power line and it remains on track to be
completed in Q2, 2022 and energized in Q3, 2022. To ensure the
plant can be energized immediately upon final completion, rental
diesel generators sufficient to support the mining operations,
ramp-up and operation of the plant at full capacity were
commissioned in Q1, 2022 and are operational.
- Underground Development Continues on Schedule, First Stopes
Completed – SilverCrest completed 2.0 kilometres ("km") of
underground development in Q1, 2022 for a total of 19.5 km of
underground development since 2019. Unit underground development
costs continued to track slightly under budget. Two of the four
mining methods proposed in the Feasibility Study, long hole and
resue, commenced with the extraction of select stopes in the
Babicanora Main, Vista and Norte veins.
- Site Safety and COVID-19 – At the end of Q1, 2022, after
2.46 million work-hours completed since the start of construction,
the Company's Lost Time Injury Frequency Rate ("LTIFR") was 0.57
per 200,000 working hours and its Total Recordable Injury Frequency
Rate ("TRIFR") was 3.98 per 200,000 working hours. To date,
SilverCrest continues to operate a confined camp, has conducted
more than 20,000 PCR tests and remains committed to its COVID-19
protocols.
- H1, 2022 Exploration and Updated Technical Report – The
H1, 2022 exploration focus at Las Chispas is to map and sample
unexplored areas and generate new drill targets. The Updated
Technical Report is now targeted to be released in H1, 2023
(previously H2, 2022) which will allow for additional data from
further in-vein drifting, initial months of stoping and processing,
reconciliation, and recent delineation drill results to be
included.
- Balance Sheet Remains Robust – As at March 31, 2022, SilverCrest had cash and cash
equivalents of $152.0 million and
$30.0 million available under a
$120.0 million project financing
facility (the "Credit Facility") with an affiliate of RK Mine
Finance. In addition to accounts payable and accrued liabilities of
$10.7 million at the end of the
quarter, $29.7 million of the capital
cost budget remains to be incurred on the Project. SilverCrest
remains well funded for plant start-up and ramp-up beginning in Q2,
2022, while still retaining a strong working capital position.
* NI 43-101 Technical Report & Feasibility Study on The Las
Chispas Project dated January 4, 2021
("Feasibility Study") ** Engineering, Procurement, and Construction
("EPC") contract with Ausenco Engineering Canada Inc.
("Ausenco")
Pierre Beaudoin, COO, remarked,
"Despite the challenges that Omicron posed in January and February,
we are extremely pleased that construction remains on schedule as
outlined in the Feasibility Study. This was no doubt a challenging
first quarter, but we are in a favorable position as we head into
the last stretch of construction. The energization of SilverCrest's
portion of the power line was one of the many milestones that our
team has accomplished over the last few quarters, and they are now
focused on the last few items that will allow plant start-up on
schedule in Q2, 2022. On the mining front, Omicron also created
challenging conditions as we started with two mining methods.
Despite these challenges, we are entering Q2, 2022 with momentum
building and a good understanding of the adjustments required. I
wish to take this opportunity to thank all our employees and
contractors for their resilience as we enter the final stage of
construction. We are excited to know this critical milestone is
around the corner."
N. Eric Fier, CPG, P.Eng, and
CEO, stated, "We are excited and proud to be nearing commissioning
in Q2, 2022. Our continued success can be attributed to the
extraordinary efforts from our team and contractors in Mexico and Canada as well as the support from the local
community. Hard work, determination and risk management processes
put in place have allowed us to progress to where we are at today
despite the many challenges faced by our industry. We are happy to
report that we are still on time and budget and have maintained a
strong balance sheet which provides flexibility as we begin the
transition to the next phase of the Company."
Las Chispas Construction
Construction of the plant and
surface infrastructure continued to track on budget and schedule.
At the end of Q1, 2022, overall construction was 95.7%. In the
quarter, the impact of the Omicron variant on construction
personnel was felt across all development fronts but more so with
the Ausenco scope and underground stoping.
During the quarter, the pumping system was completed and
energized, and the temporary power station was also completed and
is now operational. Other key infrastructure projects (process
plant and assay lab) are on schedule and expected to be completed
in early Q2, 2022. The dry stack tailings facility was nearly
complete at the end of Q1, 2022 and reached completion in early Q2,
2022. The Company's Q1, 2022 progress on its remaining construction
and development activities are as follows and shown in Figures 1 to
7 attached:
Area
|
Status
|
Progress to
date
|
Process Plant
Construction
|
On Schedule
|
Plant construction
stands at 97.1% completion and is on track with the Feasibility
Study schedule.
The
Steel-Mechanical-Piping (SMP) contract is 99% complete, the
Electricity Instrumentation (EI) contract is 87% complete while the
Pre-engineered building, the site tanks and the refinery contracts
are all at 100% complete.
Pre-commissioning
of the plant is at 44% and is expected to be at 100% by May 2022.
The crushing, flotation and leach components have completed
pre-operational testing and are ready for ore feed. Hand-over to
SilverCrest is expected in Q2, 2022.
|
Electrical Grid
Powerline (81 km) Construction
|
Energized at 2.0
MW
Expect to increase load
to 6.4 MW in Q2, 2022
Full energization
expected in Q3, 2022
|
The 33 KV powerline
planned for the Las Chispas Project is 81 km long. The combined
estimated construction progress is at 78.6%.
The first section (27
km) is owned and managed directly by CFE, the state-owned electric
utility, and consists of the upgrade of a 33 KV line already in
service. The construction (up-grade) progress is estimated at 23%.
The upgrade of this section remains on schedule for completion in
Q2, 2022.
The second section of
54 km is owned and managed by the Company. The construction of this
section is now complete and was energized (2.0 MW) in early Q2,
2022. Discussions are underway with CFE to increase the load from
2.0 MW to 6.4 MW in Q2, 2022. The final energization of the
powerline to site (7.6 MW) is now anticipated to be in Q3, 2022 due
to the delayed delivery of the Power Factor Corrector and Harmonic
Filter, both of which are required for the safe and efficient
operation at maximum load.
The temporary rental
6.0 MW diesel generators were commissioned in Q1, 2022 and are now
being used to power up the plant pre-commissioning activities. When
combined with existing U/G generators and current grid capacity
(2.0 MW), the installed capacity provides enough energy (and
flexibility) to power the underground operation and the entire site
including operation of the plant at full design
capacity.
|
Underground
Development
|
On Schedule
|
At the end of Q1, 2022,
total underground development completed at the Project reached 19.5
km and is now 2.2 km ahead of the Feasibility Study life of mine
(LOM) plan. Initial stopes in the Babicanora Main, Babicanora Norte
and Babi Vista veins were extracted in the quarter.
|
Underground
Infrastructure
|
On Schedule
|
All major
infrastructure components are on site and ready for installation in
Q2, 2022; primary ventilation fan upgrade, underground compressor,
electrical substations and dewatering pumps.
|
Stockpile
Growth
|
Slightly Behind
Schedule
|
Stockpiles increased by
an estimated 18,500 tonnes of mineralized material. This total is
approximately 6,000 tonnes less than expected due to a slower
(Omicron impact) than expected ramp up of stoping activities as the
Company undertook initial stopes in a number of veins.
Mine to Plant
Reconciliation will be undertaken throughout 2022 in parallel with
plant ramp-up.
|
Tailings Facility
Construction
(Dry Stack)
|
Complete
|
Construction started in
Q4, 2021 and reached 98.6% at the end of Q1, 2022. This project was
completed in early April 2022.
|
Assay Lab
Construction
|
On Schedule
|
Construction of the
assay lab facility in the nearby (est. 14 km) community of Arizpe
began in Q3, 2021. Construction reached 92.1% at the end of Q1,
2022 and the lab is expected to be commissioned ahead of plant
start-up.
|
Pumping
Station
|
Complete
|
The pumping station
construction was completed in Q1, 2022. This infrastructure is now
fully operational.
|
Project Capital Remains on Budget
At the end of Q1,
2022, $114.6 million (or 83.2% of the
total capital cost estimate) was committed across all capital cost
categories (process plant, underground development and
infrastructure, surface infrastructure, and owner's costs) and
$108.0 million was incurred.
$29.7 million of capital cost is
estimated to be left to incur in Q2, 2022. Of the estimated
remaining capital cost to be incurred, 22% ($6.3 million) relates to the fixed price Ausenco
scope of work (process plant construction) and 27% ($8.0 million) is the remaining contingency. The
remaining capital pertains to the SilverCrest scope of work
($5.3 million, includes tailings,
powerline, assay lab, pumping station and other smaller items),
underground development and infrastructure ($7.2 million) and the Company's project level
general and administrative costs (owner's costs) ($2.9 million).
Underground Development
Since commencing underground
development in Q1, 2019, ahead of the release of the initial
economic study, a total of 19.5 km of development has been
completed at the Project. In-vein drifting now totals 4.1 km and
access has been established in 4 veins in the Babicanora Area. An
additional 2.2 km of underground development above the 2021
Feasibility Study has been completed. Development costs
continued to track slightly under the budgeted unit cost per
metre.
An estimated 18,500 tonnes were placed on the stockpile in the
quarter. The Feasibility Study production profile includes
processing from the historic lower grade stockpiles (162,600
tonnes) and recently developed stockpile at Las Chispas, providing
upfront material for ramp-up of the process plant, flexibility, and
risk reduction during ramp-up. The lower grade historic stockpiles
will be a key element for reducing ramp-up risk as they will be
used initially as blending material for processing and as needed
through the end of 2024, allowing for a more measured ramp-up of
the underground mining rate.
Operational Readiness Plan ("ORP")
The Company
continued to advance its ORP in the quarter. At the mine, the
underground mining contractor selected for mine
operation-development-production, has mobilized most of its early
planned equipment and reported that it has hired 94% of its
essential underground staff. In the quarter and as planned,
SilverCrest hired a Mine Underground Manager who has extensive
underground experience in Mexico.
For the process plant, the recruitment was largely completed
during Q1, 2022 and efforts focused on staff training, maintenance
planning and spare parts procurement. The SilverCrest commissioning
team is ready to take over from Ausenco in Q2, 2022.
The Company anticipates ramping-up the underground mine to 750
tonnes per day by the end of Q4, 2022, largely in-line with the
strategy of staged ramp-up as outlined during the Feasibility
Study. The plant start-up with ore feed remains on track to take
place in Q2, 2022 and similarly to the mine, the plant ramp-up will
largely follow the plan outlined in the Feasibility Study. The
plant is expected to reach its nameplate capacity of 1,250 tonnes
per day in Q4, 2022 while metallurgical recoveries are expected to
reach Feasibility Study parameters in 2023. As stated in the
Feasibility Study, the processing plant will be ramped up with feed
sourced from the historical low-grade stockpiles beginning in Q2,
2022 with higher grade underground ore to be introduced in
increasing amounts beginning in Q3, 2022. Overall, for 2022, the
forecast assumes contribution from both historical stockpiles and
from either the mine or from pre-production stockpiles. The final
ratio will be dependent on plant ramp-up progress.
Safety, COVID-19, and Community
For the period of 15
months finishing in Q1, 2022, the Company's LTIFR stood at 0.57 per
200,000 working hours and its TRIFR stood at 3.98 per 200,000
working hours.
The Company's COVID-19 prevention measures continue to be
critical for construction success at Las Chispas. COVID-19 risk
mitigation efforts continued in Q1, 2022 with more than
4,900 rRt-PCR tests completed in the quarter. In total, from
May 2020 to March 2022, SilverCrest has completed more than
20,000 COVID-19 rRt-PCR tests. The Company is still operating
a confined camp in order to limit COVID-19 related risks to the
local communities.
In 2021, the COVID-19 positivity rate was 0.6% prior to site
access. In January 2022, this rate
increased to 9.9% and was followed by a rate of 3.4% in
February 2022. These increases caused
delays in the underground progress (development and stoping) and
slowed the plant construction which nearly erased the schedule
gains made by Ausenco in 2021. By March
2022, the positivity rate fell to 0.2% and construction
productivity and progress resumed to previous levels which allowed
the Project to remain on the Feasibility Study schedule.
At the end of Q1, 2022, there were more than 900 workers active
at the Project (including on-site and off-duty personnel) with, 46%
from Sonora, and 99% from
Mexico. The Company has engaged
more than 20 local businesses and is finalizing construction of the
assay lab which is located in the nearby (14 km) community of
Arizpe which is expected to
provide full-time employment for 20 to 30 people. Once fully
operational, the Las Chispas Mine will have approximately 400 to
450 full-time employees and contractors. The Company is also
progressing work related to the impacts of potential climate change
for both Las Chispas and local community. The initial results for
the physical risk assessment portion of the work related to the
Task Force for Climate Related Financial Disclosures ("TCFD") are
expected in 2022 along with a water stewardship plan that will
include and consider the findings of the TCFD data.
2022 Exploration
The focus of the 2021 Las Chispas
drill program was to support the transition to production through
further infill and initial delineation drilling of planned mining
stopes before commencing processing in Q2, 2022. In addition
to the continued support for the transition to production and the
work required to update the resource, the exploration team will
continue to generate new targets for drilling at both Las Chispas
and Picacho.
The H1, 2022 exploration focus at Las Chispas is to map and
sample unexplored areas and generate new drill targets. SilverCrest
currently has one (1) drill rig operating at Las Chispas where the
focus remains on completion of construction and process plant
commissioning.
Updated Technical Report
The Updated Technical Report
is now targeted to be released in H1, 2023 (previously H2, 2022).
This revised timing will allow the Company to incorporate data from
further in-vein drifting, initial months of stoping and processing,
reconciliation, and recent delineation drill results (stope and
vein confirmation) for resource estimation. It is expected that the
initial operating information in H2, 2022 will improve the quality
of the assumptions (costs, productivity, dilution,
mining recovery, metallurgical recovery, etc.) in
the report. This report will incorporate updated resources and
reserves, updated metallurgical test results, reconciliation (mine,
stockpile and plant) including comparison to the 2021 Feasibility
Study resource estimate, a revised mine plan, and updated operating
and sustaining costs to reflect the impact of new outsourcing
regulations and inflation from the Q3, 2020 cost base used in the
Feasibility Study.
Well Financed for Construction Completion, Commissioning, and
Ramp-Up
As at March 31, 2022, SilverCrest
had cash and cash equivalents of $152.0
million and $30.0 million
remaining under its $120.0 million
Credit Facility. This $30 million
remains available to the Company until August 2022. Prior to August 2022, the Company will assess the amount
of the potential for any additional drawdown as the Company
evaluates incoming information to help evaluate market conditions,
the ramp up, H2, 2022 drilling priorities and further optimization
opportunities.
The Qualified Person under National Instrument 43-101 Standards
of Disclosure for Mineral Projects for this news release is N.
Eric Fier, CPG, P.Eng, and CEO for
SilverCrest, who has reviewed and approved its contents.
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 top priority is on
the high-grade, historic Las Chispas mining district in
Sonora, Mexico, where it has
completed a feasibility study on the Las Chispas Project and is
proceeding with mine construction. Start-up of processing at the
Las Chispas Mine is targeted for mid-2022. 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 strategic plans, timing
and expectations for the Company's construction and exploration
programs at the Las Chispas Project and the start-up of processing
at the Las Chispas Mine in Q2, 2022. 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 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.
N. Eric Fier, CPG,
P.Eng
Chief Executive Officer
SilverCrest
Metals Inc.
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SOURCE SilverCrest Metals Inc.