In a Sept. 19 research note, analyst Jake Sekelsky reported SilverCrest Metals Inc.'s (SIL:TSX.V) updated resource estimate at Las Chispas "exceeds our expectations," and that ROTH raised its target price on the Buy-rated company to CA$5.50 per share from CA$4.50. The stock is trading at around CA$3.15 per share.
"We are particularly impressed with the growth in high-grade resources that we believe should have a strong impact on production early in the mine life," Sekelsky wrote.
The new Las Chispas resource estimate totals 86.7 million ounces (86.7 Moz) of silver equivalent (Ag eq), relayed Sekelsky, encompassing 4.3 million tons of gold and silver. This reflects a 38% increase over the size of the maiden resource, which was 62.8 Moz, and exceeds ROTH's estimate of 80 Moz.
The gold grade is 3.68 grams per ton (3.68 g/t) and the silver grade, 347 g/t silver. The grade together as Ag eq is 623 g/t. With the resource update, the high-grade portion of the resource grew 75% to 56.3 Moz from 32.2 Moz and was the catalyst for ROTH's target price increase on SilverCrest.
"Investors should remain focused on the high-grade portion of the resource," Sekelsky noted. "We are increasing our forecast for high-grade production at Las Chispas from the first two years of production to the first four years of production."
In addition, indicated Sekelsky, further upside exists at Las Chispas, where 22 identified veins "should support continued growth in the company's resource base." SilverCrest intends to continue drilling there, with six to eight rigs, through H2/18.
ROTH estimated these exploration efforts could lead to another 25% increase in silver equivalent ounces at Las Chispas, for about a 110 Moz total, Sekelsky pointed out. Such growth could support another resource update, then a positive preliminary economic assessment, both of which are expected in H1/19. Catalysts in the meantime will be additional drill results from the project.
[NLINSERT]Disclosure:
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.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.
Disclosures from ROTH Capital Partners, SilverCrest Metals, Company Note, Sept. 19, 2018
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.
