SilverCrest Mines (SVL.TO, NYSEMKT:SVLC) has provided an update on its transition from a heap leach processing of the open pit ore to a more conventional underground mining operation. The commissioning of the new mill started in May and should reach the nameplate capacity of 3,000 tonnes per day by the end of this month. Meanwhile, the gold and silver production from the leach pad is continuing throughout this month, which means SilverCrest will have continuous revenues from gold and silver sales when it’s ramping up its underground mine towards full production.
The commercial production start of the underground mine will be the final result of a three year expansion plan which will have cost $100M. Additionally, SilverCrest expects to spend the remaining estimated $7.5M in capital expenditures before the end of the third quarter, which means the company should very likely be free cash flow positive from then on.
Disclosure: The author holds no position in SilverCrest Mines. Please see our disclaimer for current positions.