Jennings Capital Updates Buy Recommendation for SantaCruz Silver - Video Posted on InvestmentPitch.com
Vancouver, British Columbia--(Newsfile Corp. - October 18, 2013) - Investment firm Jennings Capital has updated coverage on SantaCruz Silver (TSXV: SCZ) (FSE: 1SZ). Following news that the company had intersected a new high-grade silver vein at San Felipe, analyst Kwong-Mun Achong Low reiterated his buy rating and 12 month target of $2.75, a premium of 133% to the $1.18 price the day the report was issued.
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The company, which is focused in Mexico, has the producing Rosario project, two advanced-stage projects, the San Filipe and Gavilanes, and an early-stage exploration project, El Gachi.
Drilling on the Transversales vein, at its San Felipe Project in Sonora State, confirmed the continuity of a new vein both along strike and to depth. Additionally, 3 parallel veins have been identified at surface in the footwall over the currently defined strike length of the main Transversales vein, but have not been drill tested. These veins average 5 metres in width each.
Of the 11 drill holes reported, hole SCVT-02 reported 11.8 metres of 116 grams per tonne silver equivalent. The weighted average intercept of the reported assays is 2.6 metres of 199 grams per tonne silver equivalent, with 69 grams per tonne silver, 2.7% zinc, 0.17% copper, 0.99% lead, which is slightly lower than the current resource grade at San Felipe. Drilling has traced the strike at Transversales to 200 metres and a depth of 240 metres and it remains open along strike and at depth.
Arturo Préstamo Elizondo, President and CEO stated, "The confirmation that the surface outcroppings of the Transversales vein appear well mineralized along strike and to depth indicate a highly mineralized system. This, together with parallel-mineralized systems and an untested structural corridor of at least one kilometer significantly increases the potential of the San Felipe Project."
Jennings Capital analyst Kwong-Mun Achong Low stated, “We like the broader exploration potential of San Felipe, in particular the Las Lamas vein that only accounts for 5% of the approximately 50 million ounces silver equivalent resource and has averaged silver grades above 140 grams per tonne during this round of drilling."
According to management, Rosario continues to ramp up tonnage as additional faces and stopes are opened. Management expects throughput to achieve 300 tonnes per day by the end of the year as both main veins contribute to production.
SantaCruz currently trades at $1.16, well below the $2.75 target price, and with 91.2 million shares outstanding, the company is capitalized at $105.8 million.
For more information about Jennings Capital or to obtain a copy of their research report, contact your nearest Jennings Capital office. Their branches are listed on their website at www.jenningscapital.com.
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Barry Morgan, CFO