The company also announced a $76.5m EPC contract to Ausenco Engineering for construction of a processing plant at the Mexican silver-gold project


SilverCrest Metals enters into a credit agreement with an affiliate of RK Mine Finance for its Las Chispas project. (Credit: Edar from Pixabay)

Canada-based SilverCrest Metals has secured a project financing facility of $120m for the construction of its fully-owned Las Chispas silver-gold project in the Mexican state Sonora.

In this connection, the company, through its subsidiary, has entered into a credit agreement with an affiliate of RK Mine Finance.

SilverCrest Metals expects an initial capital expenditure (capex) of $100.5m for the Las Chispas silver-gold project and a life of mine (LOM) sustaining capex of $50.3m.

The company has also announced an engineering, procurement and construction contract worth $76.5m with Ausenco Engineering Canada and one of its affiliates for constructing the Las Chispas process plant.

The plant will have a processing capacity of 1,250 tonnes per day.

Ausenco Engineering is scheduled to start construction in February 2021.

Commissioning of the process plant is expected during the second quarter of 2022, while production ramp-up is scheduled to begin in the third quarter of the same year.

According to SilverCrest Metals, the feasibility study is yet to be finalised by Ausenco Engineering. Results of the study are targeted to be released in late January 2021.

SilverCrest Metals CEO and director N. Eric Fier said: “We are very pleased to have concurrently signed the Credit Agreement and the EPC Contract with two well-established and respected partners in the mining industry.

“The commitment by both partners ahead of the targeted January 2021 release of the Las Chispas Feasibility Study speaks to the strength of our team and project.

“While we recognize the challenges of building during this unprecedented time, we believe the strict and effective COVID-19 protocols that we have implemented on site, which are highlighted in these two important agreements, limit our risk.”

The Las Chispas project is made up of 28 mineral concessions. Its initial mine life is expected to be 8.5 years with SilverCrest Metals estimating an average annual production of 5,384,000oz of silver and 55,700oz of gold from the underground mine.