Chart 3 years

HIGH GRADE SILVER DEPOSITS  IN EL SALVADOR AND MEXICO

Business Summary

SilverCrest Mines Inc. is a "pure silver" exploration and development company with a portfolio of high grade silver deposits and exploration properties located in El Salvador, Mexico and an Area of Interest in Chile. The Company's longer term initiative is to acquire, develop and operate high grade silver mines throughout North, South and Central America. Primary targets will be silver projects that are amenable to accelerated development and early production

A feasibility currently underway in El Salvador is expected to be completed in 2006. Drilling has been completed in El Salvador and is underway again in Mexico.

The Company is actively evaluating high grade silver properties as potential acquisitions throughout North, South and Central America.

SilverCrest’s corporate objective is to become a significant silver asset based company with a longer-term initiative to acquire, develop and operate high-grade silver mines throughout North, South  and Central America.

Projects 

El Salvador: El Zapote Project

SilverCrest (SVL) has a 100% interest in 4,200 hectares located in northern El Salvador. The property is at the feasibility stage where it is intended, among other things, to establish mineable reserves, optimize process design (conventional mill or heap leach), verify capital and operating costs and evaluate the economic viability of the project.

Detailed drilling has now delineated the Cerro Colorado III and partially delineated the San Casimiro and Tajado deposits. These are three of several known deposits within the El Zapote concession.

The new resources for the project, which includes resources for the Tajado deposit, are presented below:

These resources are based on the combined results of work programs completed by the Company and previous operators. Work includes 87 drill holes totalling 8,662 metres and 23 trenches totalling 446 metres. The revised El Zapote resources are contained 65% in the main Cerro Colorado III deposit, 7% in the San Casimiro satellite deposit, and 29% the Tajado satellite deposit. The revised resource estimation was prepared by N. Eric Fier, CPG, P. Eng., Qualified Person and Chief Operating Officer of the Company.

Capital costs are being optimized to reflect the potential purchase of used mill equipment, possible contract mining and local construction costs for materials and labour. Operating costs are being optimized to reflect local labour costs, use of the regional electric power grid, and enhanced recoveries based on bulk sample metallurgical testwork. Permitting for an exploitation license is underway

Mexico: Santa Elena Project

The Santa Elena Project is located approximately 150 kilometres northeast of Hermosillo, Sonora, Mexico and is easily accessible with excellent local infrastructure. The Company has the right to acquire a 100% interest in the Santa Elena property by making staged option payments over a period of 5 years.

There has been previous production from both open cut and underground mining which included 45,000 tonnes grading 3.5 gpt gold (0.102 opt) and 60 gpt silver (1.7 opt) mined from an open cut during the 1980’s. There are four accessible underground levels totalling approximately 1,500 metres of development. Based on 19 drill holes (2,579 metres), ten composite surface samples (491 metres) and 25 composite underground samples (201 metres). Santa Elena has the following NI43-101 compliant resources.

Silver Angel Project

The Company has a 100% interest in +18,000 hectares located in the northern Sierra Madre Range in the State of Sonora, Mexico. The Silver Angel Concession contains an area of intense alteration that is approximately 20 kilometers long by 3 kilometers wide with structural features that host seven past producing, high grade silver gold mines, including the Cruz de Mayo Prospect.

Cruz de Mayo Prospect

A historic, unclassified resource at El Gueriguito/Cruz de Mayo is estimated at 2 million tonnes grading 149.5 gpt (4.36 opt) silver and 0.5 gpt (0.014 opt) gold.

The historic resource was based on 16 core holes and underground sampling carried out by Tormex Mining Developers Ltd. in the 1970’s.

The Company’s 20 hole drill program in 2006 at Cruz de Mayo intercepted the mineralized unitapproximately 1.5 kilometres along strike from previously defined mineralization at El Gueriguito Mine. The most significant drill intercept to date is 8.75 metres (28.7 feet) grading 343 gpt (10 opt) silver and 0.43 gpt (0.01 opt) gold in hole CM02.

The Company re-assayed 5 holes using a 4 acid digest process. The results increased silver values from 19 - 226%.

Re-analysis of the complete drill intercepts enabled the widths of significant silver values to be expanded by 25% to 387%. The combined effect of these results is to identify Cruz de Mayo as being potentially a large tonnage, low grade silver deposit. The Company is planning a reverse-circulation drilling program and bottle roll test work to determine the extent and to test the leachability of the mineralization.

A NI43-101 technical report with resource estimation is contemplated by mid 2007.  

Chile: area of interest agreement

The Company has entered into an area of interest agreement whereby SilverCrest will jointly participate in the identification, exploration and development of mining opportunities in Chile. The area of interest is located in Region III in northern Chile and comprises approximately 70,000 square kilometers.

SilverCrest intends to establish a presence in Chile to acquire and develop high grade silver deposits. The area of interest is host to several world class silver deposits. SilverCrest entered into the agreement to access technical expertise and established infrastructure in Chile as well as an extensive data base of mining properties, certain geological knowledge and professional expertise within the area of interest. SilverCrest believes that the combination of technical expertise at the exploration level and SilverCrest’s operating experience will provide synergies for its corporate activities in Chile. 

Recent News: SilverCrest Announces Significant Increase in Resources With Addition of Santa Elena, Mexico

SilverCrest Mines Inc. announced it has completed its resource estimation for the 100% owned Santa Elena Project in northern Mexico.

Indicated Resources are estimated at 2.46 million tonnes grading 55.7 gpt (1.62 oz/t) silver and 2.16 gpt (0.063 oz/t) gold. Inferred Resources are estimated at 3.51 million tonnes grading 78.3 gpt (2.28 oz/t) silver and 1.42 gpt (0.041 oz/t) gold. The Indicated Resource contains 4.4 million ounces of silver and 171,000 ounces of gold and the Inferred Resource contains 8.83 million ounces of silver and 159,000 ounces of gold based on a 60 gpt silver equivalent cut-off grade. These resources are a result of a phase I drilling and sampling program and are more than double the Company's preliminary target of 15 million ounces silver equivalent. It is expected that the planned phase II drilling and sampling program will add to the total resource and improve the confidence level of the current resource numbers.

The Company now has reported resources at Santa Elena in Mexico and at its El Zapote property in  El Salvador. The addition of the Santa Elena resource increases the Company's total Indicated Resources to 26.5 million ounces silver equivalent, representing an increase of 124%. Total Inferred Resources now are estimated to be 22.3 million ounces silver equivalent representing an increase of 464%. Silver equivalency is based on a silver to gold ratio of 60:1 and assumed 100% recovery.

This significant increase in the Company's resource base is considered another important milestone in its goal of becoming a major silver asset - based company by acquiring high grade, low cost silver-gold resources that may be expanded.

SilverCrest's immediate initiative is to continue to acquire and develop substantial silver resources and ultimately to operate high grade silver mines throughout North, Central and South America.

Fundamental Considerations

Comparison with a Peer Group

SilverCrest  compares very favourably (see table below):

Santa Elena has a total resource of 33 million ounces of silver or a market cap  of $ 0.81/Ounce

El Zapote has a total resource of  15.6 million ounces of silver or a market cap of $ 1.73/Ounce

Both properties have a total resource of  48.8 million ounces of silver or a market cap of $ 0.55/Ounce, as well as a market cap of US$ 0.30 per pound of zinc.

SilverCrest has been unable to pursue its goals in Honduras for which reason investors liquidated their holdings without realizing that the company made significant progress on its properties in Mexico. This may be the reason that SilverCrest remains grossly undervalued for the time being. – which will unlikely remain so for long.

Technical Considerations

Peter Zihlmann

www.pzim.com

invest@pzim.ch

Tel. +41 44 268 51 10

Mobile +41 79 379 51 57

THE TIMELESS PRECIOUS METAL FUND

is a shareholder in the company and will benefit from any increase in the company’s share price.

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Disclosure: The author has not been paid to write this article, nor has he received any other inducement to do so. The author is a shareholder in the company and will benefit from any increase in the company’s share price.

Disclaimer: The author’s objective in writing this article is to invoke an interest on the part of potential investors in this stock to the point where they are encouraged to conduct their own further diligent research. Neither the information nor the opinions expressed should be construed as a solicitation to buy or sell this stock. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions in the stock.

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