SilverCrest Metals (NYSE: SILV) Update - Sept 15

SilverCrest Metals (NYSE: SILV) Update - Sept 15

Postby dan_s » Thu Sep 15, 2022 10:06 am

SilverCrest is hosting another webinar for us on October 4. You must register on the EPG website to attend the live event.

Note from Stifel this morning:
SilverCrest Metals (SIL-TSX, C$7.67, Buy; Target C$15.00)
- Las Chispas update on commissioning, first metal sale expected in 3Q22 - by Stifel analyst Stephen Soock

"SilverCrest announced an update on commissioning activities at its Las Chispas Mine in Sonora,
Mexico. Over the first three months, the processing plant has either performed in-line
or ahead of the design curve for all metrics. SilverCrest remains on track to complete
an Updated Technical Report in 1H23. We are slightly concerned about the slower
than expected mining rates given one of the company's mining methodologies is
resue mining, which while highly selective in nature is also time intensive. SilverCrest
remains well-funded with ~US$101.6 MM cash on hand as of Aug.31st. SIL trades
at a spot P/NAV of 0.79x, below its 12-month historical average of 0.94x and its 52-
week high of 1.21x.
"

Key Points

SilverCrest announced an update on commissioning activities at its Las Chispas Mine in Sonora, Mexico. Over the first three months,
the processing plant has either performed in-line or ahead of the design curve for all metrics. A total of 53,600 tonnes of material has
been processed since start-up, with August 2022 averaging 784 tpd, an increase of 46% m/m. Management reinstated that throughput will
increase to 1,250 tpd in 4Q22. Recoveries are tracking ahead of the planned ramp-up with 90.7% AgEq in August 2022 vs. the company
projection of 81.5% AgEq. SilverCrest remains on track to complete an Updated Technical Report in 1H23.

A total of 109k tonnes of ore has been mined up to August, ~9% below the feasibility study target. The company now anticipates ramp-up
in the underground mine to be between 600 and 700 tpd by the end of 2022, lower than the 750 tpd projected in the Feasibility Study.

The 55km power line completed in 2Q22 was 100% operational as of Aug. 2022, including all required support equipment. However, some
minor production delays have occurred due to stability being lower than target. The final connection to the CFE power line (now at 80%
completion) is schedule to be finished for 4Q22 and to improve the stability of power.

Impact: Neutral/Slight Positive

There is some concern regarding the lower than expected mining rates considering one of SilverCrest's mining methodologies is resue
mining. Despite it being highly selective, which usually produces a guaranteed high grade feed to the mill, it has a much slower rate than
simply blasting and grabbing. We expect total 2023 production will be ~14.3 moz AgEq.

SilverCrest remains well-funded, with ~US$101.6 MM of cash on hand as of Aug.31st

Based on current spot prices the company is trading at a 2023E FCF Yield of ~22%. SIL trades at a spot P/NAV of 0.79x, below its 12-
month historical average of 0.94x and its 52-week high of 1.21x. We look forward to the announcement of commercial production and drill
results at Las Chispas and Picacho through 2022 and the updated FS and strong free cash flow in 2023.

We maintain our Buy rating and $15.00 target.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 30119
Joined: Fri Apr 23, 2010 8:22 am

Re: SilverCrest Metals (NYSE: SILV) Update - Sept 15

Postby dan_s » Thu Sep 15, 2022 10:12 am

Raymond James also put out a bullish note that said about the same thing.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 30119
Joined: Fri Apr 23, 2010 8:22 am


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