By The Gold Report
Source: Streetwise Reports 03/21/2019
The newly announced resource update and what it means in terms of project economics is captured in a ROTH Capital Partners report.
In a March 18 research note, analyst Jake Sekelsky reported that ROTH Capital Partners raised its target price on Buy-rated SilverCrest Metals Inc. (SIL:TSX.V) to CA$5.50 per share from CA$5 because its “positive resource update sets the stage for a robust preliminary economic assessment (PEA).”
Sekelsky reviewed the updated Las Chispas resource estimate and how it compares to the previous one.
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The new estimate encompasses Indicated resources of 1 million tons (1 Mt) at average grades of 6.98 grams per ton (6.98 g/t) gold and 710.6 g/t silver, or 1,234 g/t silver equivalent (Ag eq), for a total of 39.8 million ounces (39.7 Moz) Ag eq.
Inferred resources now total 3.6 Mt at average grades of 3.32 g/t gold and 332.5 g/t silver, or 68.1 Moz Ag eq.
The entire Las Chispas resource grew 24% to 108 Moz Ag eq, in line with ROTH’s estimate of 110 Moz. Sekelsky purported that SilverCrest could potentially add another 25 Moz to the resource by 2020, taking the total to 135 Moz Ag eq, in light of its “aggressive exploration plans and past hit rate.”
The increase in ounces along with a boost in grades since the previous resource estimate are reflected in the update, highlighted Sekelsky. That should make for a robust maiden PEA, expected in Q2/1, which depicts a “high-grade, low-capex project generating significant free cash flow.”
Sekelsky concluded, “Las Chispas is a rare asset that has the potential to generate positive cash flow at even lower metals prices, an attribute we believe majors would gravitate toward in a lower price environment.” As such, the project is a prime takeout candidate, particularly as SilverCrest continues derisking it and growing its resource.
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from ROTH Capital Partners, SilverCrest Metals, Company Note, March 18, 2019
Regulation Analyst Certification (“Reg AC”): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Shares of SilverCrest Metals may be subject to the Securities and Exchange Commission’s Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.
( Companies Mentioned: SIL:TSX.V,