The Gold Report
Notable Quotes
"ICG has closed a CA$2.5M flow-through placement." (12/24/15) Integra Gold Corp. - Thibaut Lepouttre, Caesars Report More >
"The exploration upside at MAG's Juanicipio project is substantial." (12/23/15) MAG Silver Corp. - Gwen Preston, Resource Maven More >
"AKG's management continues to deliver on its development milestones." (12/22/15) Asanko Gold Inc. - Nana Sangmuah, Clarus Securities More >
"We are initiating coverage on KDX with a Buy rating." (12/21/15) Klondex Mines Ltd. - Don Blyth, Paradigm Capital More >
"VIT's Eagle is a shovel-ready, fully permitted, prefinanced gold project." (12/17/15) Victoria Gold Corp. - Tom Hayes, Edison Investment Research More >
Canaccord Genuity Initiates Coverage of SVL
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NICHOLAS CAMPBELL, Canaccord Genuity
(01/25/2011)
"SilverCrest Mines is a junior precious metal producer ramping up gold and silver production from its 100%-owned Santa Elena mine in Mexico, which is designed to produce 35,000 ounces of gold and 600,000 ounces of silver per year. We are initiating coverage of SilverCrest Mines with a SPECULATIVE BUY recommendation and a target price of CAD$3.30 per share for the following reasons: 1.)Emerging production: SilverCrest is on track to achieve commercial production in early 2011 with design capacity of 35 Koz. gold and 600 Koz. silver; 2.) Organic growth: Through the development of a mill and underground operation, we forecast production growth from 19 Koz. Au Eq. (1.1 Moz. Ag Eq.) in 2011 to 100 Koz. Au Eq. (5.1 Moz. of Ag Eq.) by 2015; and 3.) Consolidation potential: Given continued consolidation in the Mexican precious metals space, SilverCrest is a potential acquisition target for a larger-cap producer. We value SilverCrest's Santa Elena mine using a discounted cash flow analysis. We estimate a peak silver and gold price (US$30/oz. Ag, US$1,500/oz.) NPV (5%) of US$369.2M. In addition, we ascribe an in-situ value of US$38.3M to account for the potential mine life extension associated with the Cruz De Mayo deposit. We estimate a peak silver and gold price NAVPS (5%, US$30/oz. Ag, US$1,500/oz. Au) of CAD$4.38. We value SilverCrest Mines based on a 0.75x multiple to our peak silver and gold price NAVPS (5%), which gives us a target price of CAD$3.30 (rounded)." |
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