Jennings Initiates Coverage on SVL

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Jennings Initiates Coverage on SVL

STUART MCDOUGALL, Jennings Capital Inc. (09/14/2009)

Project Financing Risk – minimal: The company has arranged $24.5 million in gold purchase and project debt facilities with Sandstorm Resources Ltd. (TSXV-SSL) and Macquarie Bank Ltd. to cover the estimated remaining capex and property payments of $18 million.

Scheduling Risk – minimal: A 3-stage crusher and Merrill-Crowe plant have been built and are ready to be delivered to site.

Permitting Risk – nil: A Change of Land Use Permit was approved in May 2008, followed by an Environmental Impact Assessment in August 2008. Secondary blasting and water permits are also now in-hand.

Ejido Risk – nil: A 20-year surface rights agreement was signed with the local community in December 2007.

Upside – lots: Four quartz-vein structures have been mapped on surface in the vicinity of the similarly hosted Main zone, and two are cited for drilling. The nearby Cruz De Mayo silver deposit offers further near-term upside to production, while the Silver Angel project, located a few kilometers to the north, provides longer-term potential. SilverCrest also owns the advanced El Zapote silver project in El Salvador (no value currently ascribed).

We are initiating coverage on SilverCrest Mines Inc. with a SPECULATIVE BUY recommendation and 12-month target price of C$1.40/fd share, based on a multiple of 1.0x our adjusted NAV. View full report report from Jennings Capital Inc.

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Under SEC rules, analysts are required to disclose their interest in securities that they cover. We strongly encourage you to contact them to understand any potential conflicts of interest they may have.

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Jennings Initiates Coverage on SVL

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