SilverCrest Mines Inc SVLC

RE: Heating UP in Northern Mexico...

[paljoey]

Kimber's market cap is twice that of Silvercrest's , yet silvfercrest is moving to production within the next few months,and fully funded.

There are some not-so-obvious negatives about Kimber's deposit.

There arnt enough gold resources in the low-grade halo for an open pit for a heap leach operation.
Rather, the deposit will require an underground mine which requires much more capital and a longer  development time.

Even at that, those grades, while good , are not very high for an underground mine and would likley mean high cash costs.
Compare this with Silvercrest.,

The initial capital costs are US$20.0 million, including a 15% contingency and, working capital of US$3 million. Sustaining capital costs are estimated at US$3.7 million over the 8 years mine life.

Cash operating costs are approximately US$328 per ounce of gold equivalent. Cash operating costs for the first two years of production average less than US$250 per ounce of gold equivalent. Silver to gold conversion is based on an Ag-Au ratio of 64:1 for the Base Case.

Note that reserves were estimated using a 0.5 gm/ton cut-off and with gold at $1150 , that cut-off would likley be at 0.3 gms/ton which would bring more gold into the economic categories.

Also, the premium high grades recently  found in the open pit infill drills will boost not only the production rate of gold but also  its recovery rate and could result in 150,000 oz of gold equivalent recovered in the first 2 years , as well as reducing cash cost to levels less than $200 per oz.

That could mean combined cash flows for the first 2 years of up to $150 million , for a quick payback while providing funds for future development and expansion.

I know of no other junior gold that is so undervalued , essentially trading at only 1/2 of its projected cash flows for just the first year of mining.