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Silvercrest Mines, Inc.

October 26, 2010

SVL - TXS.V
STVZF - PINK SHEET

Price:	$1.31 TSX $1.26 Pink Sheet
Long-term debt:
Issued and outstanding:	60,836,429
Warrants and options:	15,979,713
Fully diluted shares:	76,815,429

Operating Income

2011 E:	60¢
2012 E:	60¢ - 75¢

SilverCrest Mines Inc. is a Mexican precious metals producer with headquarters based in Vancouver, BC. SilverCrest's flagship property is the 100% owned Santa Elena Mine, which is located 150km northeast of Hermosillo, near Banamichi in the State of Sonora, Mexico. The mine is a high grade, epithermal gold and silver producer, with an estimated life of mine cash cost of less than US $375 per ounce of gold equivalent. SilverCrest anticipates that the 2,500 tons per day facility will produce approximately 35,000 ounces of gold and 600,000 ounces of silver per year from the open pit heap leach operation.

SilverCrest is a Vancouver-based gold and silver producer which has been financed by a combination of a $12 million pre-payment from Sandstorm Resources, a $12,500,000 bank loan facility from Macquarie Bank and $6,300,000 equity financing.

The company entered into a letter of intent with Sandstorm pursuant to which Sandstorm has agreed to purchase 20% of the gold produced over the life of the mine of the Santa Elena Project for an up front payment of U.S. $12 million plus a further payment upon delivery of the gold equal to the lesser of (a) U.S. $350 and (b) the then prevailing market price per ounce of gold. The payments will increase at 1% per annum commencing on the third anniversary of the date that the Santa Elena Project begins commercial production. The company estimates that approximately 50,000 ounces of gold will be provided to Sandstorm over the life of the current open pit plan or approximately 6,250 ounces per year. The terms of the letter of intent do not affect the estimated 4.88 million ounces of silver recoverable over the life of the initial open pit heap leach operation.

Santa Elena Financing

Equity CAD $6.3 million

- Unit consisting of one common share @ $.50 plus 1/2 warrant @ $0.65.

Macquarie Bank Loan Facility U.S. $12.5 million

- U.S. $6.8 million drawn down
- 55,000 oz. Au hedged at U.S. $926 over 3 years

Sandstorm Resources Gold Purchase Agreement U.S. $12 million

- Upfront U.S. $12 million payment received plus:
- U.S. $350 per oz. for 20% of future production on open-pit oz. Au
- pro-rata capital contribution and $400 per oz. for underground production

In many respects the company is the forerunner of future conversion of exploration companies, the producing companies, by loans or investments by large finance companies. Originally, Sandstorm invested $12 million in the development of the gold production of Silvercrest and Macqueri Bank added a $6.3 million to the project.

The $20 million project financing, Silvercrest announced that the first shipments of gold occurred in October, 2010. The inaugural shipment included 383 kilograms of combined metals comprised of 368 ounces of gold and 10,035 ounces of silver, with an estimated value of $700,000.

The rate of production which is to be reached in the first quarter of 2011, will be at the rate of 35,000 ounces of gold and 600,000 ounces of silver per year. The mines, which are all in Mexico, produce from the 100%-owned Santa Elena mine and is estimated with a lifetime cash cost of less than $375 per ounce of gold. The company can process 2,500 tons of ore per day and it is capable of 35,000 ounces of gold and 600,000 ounces of silver production per year. Based on the agreement with two finance companies, the division of production is as follows:

The first 20% of gold goes to Sandstorm at a price of $350.
The second lot of 17,000 ounces goes to Macquarie at a price of $926.
The remaining 11,000 would be 100% accrued to Silvercrest.

35,000 total gold products

Receipts

20%	7,000 ounces to Sandstorm for $350

$2,450,000

17,000 for $926

15,742,000

12,000 market price $1,360

14,960,000

600,000 silver $24

14,400,000

TOTAL

47,552,000

Fully diluted shares

77M
61.75¢ - Gross Revenue/Sh

Based on current plans and the ability of the company to finance expansion internally, in three years the gold production could reach 100,000 ounces, which is almost three times the current figure.

The valuation of Silvercrest depends on the price of gold and silver. It is a type of company which really can flourish in a booming precious metals atmosphere. 2010 is history's highest market for gold and silver. The various forms of silver and gold products which are available with ETF's and coins, have contributed to the increased price of the metals. For instance, since January 8, 2008, the price of silver has increased from $8 to $24, and the current estimate is that the price of silver even in the year 2010 may be above $30.

As silver becomes more of an investment vehicle, there are what's called derivatives that trade on the New York Stock Exchange and therefore worldwide. Silver Wheaton which is full of silver products from companies which receive financing from Silver Wheaton's management and purchase the silver at $4, has a more complex price structure, different from any silver mine. Silvercrest is in many respects a modification of Silver Wheaton, and therefore our analysis of the future price is of vital importance.

The leverage factor -- increases in gold and silver prices -- are impressive.

Price Increase		EPS Increase
$100 gold		1.1M
$2 silver	$600,000M	1.2M
		2.3M
	77M shares	0.04	4¢
$500 gold
$10 silver

We conclude that Silvercrest has a tremendous future. Furthermore, it is almost inevitable that both gold and silver-related companies that are financed by outside sources and created to remain independent, may in the future relate to silver and gold-indexed bonds.

In other words, Silvercrest is an intermediate vehicle of the past mining entities and the newly backed finance vehicles that will dominate the precious metals market in the future.

Conclusion

Silvercrest, at the current price structure of $1,350 per ounce of gold and $24 per ounce of silver, has an operating gross income of 60¢.

With 20% price increase it is 75¢.

At gold being $2,000/ounce and silver at $30/ounce, the per share earnings could top 75?

Silvercrest is not understood -- this is why:

The stock is undervalued.

Disclaimer

Information contained herein is based on data obtained from recognized statistical services, issuers reports or communications or other sources believed to be reliable. However, such information has not been verified by us and we do not make any representation to its accuracy or completeness. Any statement non-factual in nature constitutes only current opinions which are subject to change. BERAL INC. or their officers, directors, analysts or employees may have positions in the securities or commodities referred to herein, and may as principal or agent buy and sell such securities or commodities. An employee, analyst, officer or a director of BERAL INC. may serve as a director for companies mentioned in this report. Neither the information nor any comment expressed shall constitute an offer to sell or a solicitation of an offer to buy any securities or commodities mentioned herein. There may be instances when fundamental, technical and competitive opinions may not be in concert. This firm may from time to time perform investment banking or other services for or which investment banking or other businesses from any company mentioned in this report.