Silvercrest (TSX: SVL) (NYSE MKT: SVLC) Announces
Q2, 2015 Financial Results; Operating Cash Flow of $8.1 million ($0.07/share),
Earnings of $3.86 million ($0.03/share), Guidance for Cash Cost/AgEq Ounce
Reduced
Vancouver, BC - August 13, 2015 (Investorideas.com
Mining Stocks Newswire) SilverCrest Mines Inc. (TSX:SVL; NYSE MKT: SVLC) (the "Company" or "SilverCrest")
is pleased to announce its consolidated interim financial results for the
second quarter ("Q2") ended June 30, 2015. All financial information
is prepared in accordance with International Financial Reporting Standards
("IFRS") and all dollar amounts are expressed in U.S. dollars unless
otherwise specified. The information in this news release should be read in
conjunction with the Company's unaudited condensed consolidated interim
financial statements for the three and six months ended June 30, 2015 and
associated management discussion and analysis ("MD&A") which are
available from the Company's website at www.wilvercrestmines.com and under the Company's profile on SEDAR at www.sedar.com.
J. Scott Drever, Chief Executive Officer, stated;
"The second quarter was another successful quarter for SilverCrest. Santa
Elena's record Q2 AgEq (3) production delivered strong financial results
despite the lower precious metals price environment. We generated cash flow
from operations (1)(2) of $8.1 million ($0.07 per share) and net earnings of
$3.86 million ($0.03 per share). We maintained a strong balance sheet at June
30, 2015 with $36.4 million in cash and cash equivalents and working capital of
$51.0 million. For Q2, 2015, our cash operating cost (1)(2) was $8.05 per AgEq
(3) ounce sold and our all-in sustaining cash cost(2) was $10.97 per AgEq (3)
ounce sold. Due to the strong performance in Q2, 2015 and continuing operational
improvements, SilverCrest increased its 2015 corporate production guidance to a
range of 4.7 – 5.1 million AgEq (3) ounces. The Company has reduced its 2015
operating cash cost range to $9 – $10 per AgEq ounce from $10 – $11 per AgEq
ounce and all-in sustaining cash cost range to $12 – $13 per AgEq ounce from
$14 – $15 per AgEq ounce. Our cash operating numbers continue to make us one of
the lowest cost precious metal producers."
FINANCIAL HIGHLIGHTS OF Q2, 2015, COMPARED TO Q2, 2014
·
Cash flow from operations (1)(2) was $8.05 million
($0.07 per share, basic and diluted), an increase of 163%.
·
Cash operating cost per AgEq ounce sold (2) (3) was
$8.05, an increase of 13%.
·
All-in sustaining cash cost per AgEq ounce sold (2)
(3) was $10.97, a decrease of 7%.
·
Revenues increased 169% to $20.7 million.
·
Metal sales of 515,070 ounces of silver and 11,567
ounces of gold increased 216% and 144%, respectively.
·
Realized average spot metal prices declined from
$19.67 to $16.54 (16%) for silver and from $1,296 to $1,202 (7%) for gold.
·
Net earnings increased 194% to $3.86 million ($0.03
per share, basic and diluted).
·
Adjusted earnings (2) increased 361% to $4.5
million ($0.04 per share, basic and diluted).
·
Cash and cash equivalents totalled $36.4 million,
compared to $40.1 million (at June 30, 2014).
·
Working capital was $51.0 million, compared to
$44.5 million (at June 30, 2014).
·
Metal inventory included 247,841 (Q2, 2014 –
69,000) ounces of silver and 5,090 (Q2, 2014 – 1,330) ounces of gold.
·
Scotiabank Credit Facility: Drawdown – $15.0
million; Available – $5.0 million.
(1) Cash flow from operations before changes in
working capital items.
(2) These are Non-IFRS performance measures. Refer
to "CAUTIONARY NOTE REGARDING NON-IFRS PERFORMANCE MEASURES".
(3) Silver equivalent ("AgEq") ratio for
Q2, 2015 of 66.7:1 was calculated using metal prices of $1,200/oz for gold and
$18/oz for silver. For consistency with, comparative periods, the AgEq ratio
reported during 2014 was changed from 60:1 to 66.7:1. All numbers are rounded.
Comparison of the three months ended June 30, 2015
to June 30, 2014
Net earnings were $3,866,560 ($0.03 per share basic
and diluted) for the second quarter compared with $1,314,350 ($0.01 per share
basic and diluted) in the second quarter of 2014. The increase in net earnings
in the second quarter was primarily attributed to a significant increase in
ounces produced and sold, relating from the transition from an open pit heap
leach operation to an underground mining and milling operation. Q2, 2015
production was also assisted by better silver and gold recoveries which
increased from Q1, 2015 from 60% to 74% and 91% to 96% respectively. These
positive aspects were partially offset by lower realized metal prices, higher
operating costs and an increase in taxes compared to Q2, 2014.
Silver and gold revenue amounted to $20,731,379
(2014 – $7,719,057) in the second quarter. Silver sales totalled 515,070 ounces
(2014 – 163,026), 216% higher than the same period in 2014. The foregoing
silver sales, combined with a 16% lower average realized price of $16.54 (2014
– $19.67) per ounce, resulted in 166% more silver revenue. Total gold revenue
in the second quarter increased 124% compared to the same period in 2014. Total
gold sales were 11,567 ounces (2014 – 4,743) or 144% above 2014. The Company
sold 8,908 (2014 – 3,794) ounces of gold at an average realized price of $1,202
(2014 – $1,296) per ounce, a 7% decline, and delivered 2,659 gold ounces (2014
– 949) under the Sandstorm Purchase Agreement for cash of $357 (2014 – $354)
per ounce.
Cost of sales amounted to $10,356,202 (2014 –
3,046,958). Cash operating cost and all-in sustaining cash cost per AgEq ounce
sold in Q2, 2015 were $8.05 and $10.97 (Ag: Au 66.7:1) per ounce, respectively,
compared to $7.12 and $11.73 (Ag: Au 66.7:1) per ounce in the comparable 2014
quarter. The increase in cash operating cost per AgEq ounce sold for Q2, 2015,
is a result of additional direct production costs related to the transition of
Santa Elena during 2014 from an open pit heap leach operation to an underground
mining and milling operation. The cost increases were partially offset by the
benefit of a weaker Mexican Peso. All-in sustaining cash operating cost per
AgEq ounce sold decreased from $11.73 to $10.97 primarily from the benefit of a
weaker Mexican Peso. Cash operating costs for Q2, 2015 experienced a favorable
foreign exchange effect, as the quarterly average Mexican Peso weakened against
the U.S. Dollar by 18% compared to Q2, 2014.
Approximately 50% of Q2, 2015 cash operating costs
are in Mexican Pesos. (Refer to "Cautionary Note Regarding Non-IFRS
Performance Measures").
Depletion, depreciation and amortization increased
to $3,080,939 (2014 – $1,577,897) with the incorporation of a depletion charge
for the underground mine and depreciation charges for Santa Elena's mill and
CCD/MC processing facilities that were not recorded in Q2, 2014.
Proposed Transaction with First Majestic
As announced on July 27, 2015, the Company entered
into a definitive agreement ("Arrangement") with First Majestic
whereby First Majestic will acquire all of the issued and outstanding shares of
SilverCrest for consideration of 0.2769 common shares of First Majestic plus
CAD$0.0001 in cash, and 0.1667 common shares of New SilverCrest for each
SilverCrest common share held. The transaction excluding New SilverCrest
equated to a 37% premium to the SVL share price as of the date of the
Arrangement and a 21.4 % ownership in First Majestic by SilverCrest
shareholders. In addition to ownership in First Majestic, SilverCrest shareholders
will benefit from First Majestic's liquidity in the market place, diversity
provided by six operating mines, and management's long history of successful
operations in Mexico. A meeting of SilverCrest shareholder's has been called
for September 25, 2015 to seek approval for the transaction with closing
expected to occur in early October.
OPERATIONAL UPDATE
As of July 31, 2015, the Santa Elena Mine has
generally been performing better than operating numbers reported for the first
half ("H1"), 2015. Currently, the average underground ore mining rate
is 1,200 tonnes per day. Average milling rate is 3,000 tonnes per day with a
planned blend of mill feed of 40% underground and 60% leach pad ore. The most
significant operational improvement is the increase in silver recoveries from a
H1, 2015 average of 68% to a current recovery rate of 85%. Recovery increase is
attributed to injection of oxygen and lead nitrate into processing leach tanks.
The current annual budget estimate for silver recoveries is 70%.
Q2 FINANCIALS CONFERENCE CALL
A conference call to discuss the results for the
2015 second quarter financial results will be held on Thursday, August 13,
2015. The call will be held at 10am PDT (1pm EDT). To participate in the
conference call, please dial the following:
Updated Participant Dial-In Number(s)
Local – Toronto: 1-416-764-8688
Local – Vancouver: 1-778-383-7413
North American toll-free: 1-888-390-0546
A replay of the conference call will be archived
for later playback on the Company's website www.silvercrestmines.com.
The Qualified Person under National Instrument
43-101 Standards of Disclosure for Mineral Projects for this news release is N.
Eric Fier, CPG, P.Eng and Chief Operating Officer for SilverCrest Mines Inc.,
who has reviewed and approved its contents.
SilverCrest
Mines Inc. (NYSE MKT: SVLC; TSX: SVL) is a Canadian precious
metals producer headquartered in Vancouver, BC . SilverCrest's flagship
property is the 100%owned Santa Elena Mine, located 150 kilometres northeast of
Hermosillo , near Banamichi in the State of Sonora , Mexico. The mine is a
highgrade, epithermal silver and gold producer, with a current reserve
estimated life of mine of 8 years and average operating cash costs of $12 per
ounce of silver equivalent (64.5:1 Ag:Au based on ounces sold). SilverCrest
anticipates the 3,000 tonnes per day conventional mill facility at the Santa
Elena Mine should recover an average of 1.6 million ounces of silver and 33,800
ounces of gold per annum over the current reserve life. Exploration programs
continue to result in discoveries at Santa Elena and have advanced the
definition of a large polymetallic deposit at the La Joya property in Durango
State, Mexico.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This news release contains "forward-looking
statements" within the meaning of Canadian securities legislation and the
United States Securities Litigation Reform Act of 1995. These include, without
limitation, statements with respect to: the economic viability of a project;
strategic plans and expectations for the development of the Company's
operations and properties; estimates of mineral reserves and mineral resources;
the amount of future production of gold and silver over any period; the amount
of expected grades and ounces of metals and minerals; expected cash operating
costs and outflows; life of mine and prices of metals and minerals.
These forward-looking statements relate to analyses
and other information that are based on, without limitation, the following
estimates and assumptions: presence of and continuity of metals at the
Company's projects; cost of production and productivity levels at the Santa
Elena Mine; availability and costs of mining equipment and skilled labour;
accuracy of the interpretations and assumptions used in calculating reserve and
resource estimates; operations not being disrupted or delayed by unusual
geological or technical problems; and ability to develop and finance projects.
Forward-looking statements are subject to a variety
of known and unknown risks, uncertainties and other factors which could cause
actual events or results to differ from those expressed or implied by the
forward-looking statements, including, without limitation: risks related to
precious and base metal price fluctuations; risks related to the fluctuations
in the price of consumed commodities; risks related to fluctuations in the
currency markets (particularly the Mexican peso, Canadian dollar and United
States dollar); risks related to the inherently dangerous activity of mining,
including conditions or events beyond our control, and operating or technical
difficulties in mineral exploration, development and mining activities;
uncertainty in the Company's ability fund the exploration and development of
its mineral properties; uncertainty as to actual capital costs, operating
costs, production and economic returns, and uncertainty that development
activities will result in profitable mining operations; risks related to
reserves and mineral resource figures being estimates based on interpretations
and assumptions which may result in less mineral production under actual
conditions than is currently estimated and to diminishing quantities or grades
of mineral reserves as properties are mined; and risks related to governmental
regulations and obtaining necessary licenses and permits.
Should one or more of these risks and uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described in the forward-looking statements. The
Company's forward-looking statements are based on beliefs, expectations and
opinions of management on the date the statements are made. For the reasons set
forth above, investors should not place undue reliance on forward-looking
statements. The Company undertakes no obligation to update or revise any
forward-looking statements, except as otherwise required by applicable law.
CAUTIONARY NOTE
REGARDING NON-IFRS PERFORMANCE MEASURES
This
news release includes certain terms or performance measures commonly used in
the mining industry that are not defined under IFRS, "Cash flows from
operations before changes in working capital items", "Cash operating
cost per AgEq ounce sold", "All-in sustaining cash cost per AgEq
ounce sold", "Adjusted earnings" and "Adjusted earnings per
share". The Company believes that, in addition to conventional measures
prepared in accordance with IFRS, certain investors use this information to
evaluate SilverCrest's performance and its ability to generate cash flow. The
data presented is intended to provide additional information and should not be
considered in isolation or as a substitute for measures of performance prepared
in accordance with IFRS. Please refer to the Company's MD&A for the six
months ended June 30, 2015, for a reconciliation of these measures to reported
IFRS results.
Contact:
Fred Cooper
Telephone: (604) 694-1730 ext. 108
Fax: (604) 694-1761
Toll Free: 1-866-691-1730
Email: info@silvercrestmines.com
Website: www.silvercrestmines.com
Suite 501 - 570 Granville Street, Vancouver, BC Canada V6C 3P1
Telephone: (604) 694-1730 ext. 108
Fax: (604) 694-1761
Toll Free: 1-866-691-1730
Email: info@silvercrestmines.com
Website: www.silvercrestmines.com
Suite 501 - 570 Granville Street, Vancouver, BC Canada V6C 3P1
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