Vancouver,
British Columbia
- March 24, 2014 (Investorideas.com Mining Stocks Newswire) SilverCrest Mines Inc. (
TSX:SVL) (
NYSE MKT: SVLC)
is pleased to announce its audited consolidated financial results for
the fourth quarter and year ended December 31, 2013. The fourth quarter
and 2013 year end financials results reflect a one-time non-cash
deferred tax accounting adjustment of $5.8 million as a result of the
enactment of the Mexican Tax Reform. All financial information is
prepared in accordance with 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 audited
consolidated financial statements for the year ended December 31, 2013
and associated management discussion and analysis ("MD&A") which are
available from the Company's website at
www.silvercrestmines.com and under the Company's profile on SEDAR at
www.sedar.com.
2013 YEAR END FINANCIAL HIGHLIGHTS :
- Cash flow from operations (1) $26.1 million ($0.24 per share)
- Cash operating cost per silver equivalent ounce sold (2) $7.78 (Ag:Au 60.5:1)
- Revenues reported $54.9 million
- Mine operating earnings $28.9 million
- Deferred tax - Mexican mining royalty $5.8 million (non-cash IFRS accounting entry)
- Net earnings $8.5 million ($0.08 per share)
- Cash and cash equivalents $14.4 million (at Dec. 31, 2013)
- Working capital $25.4 million (at Dec. 31, 2013)
- Scotiabank Credit Facility $40.0 million fully available (at Dec. 31, 2013)
N. Eric Fier, President and COO stated; "2013 was
another successful year for SilverCrest, notwithstanding the lower
precious metals price environment. The Santa Elena mine delivered strong
production and operating cost performance throughout 2013 which allowed
SilverCrest to deliver robust
financial
results. Management are pleased that Santa Elena achieved a cash
operating cost of $7.78 per silver equivalent ounce sold compared to
Company guidance of $8.50 and an all-in sustaining cash cost per silver
equivalent ounce sold (2) of $13.05 which also beat Company guidance of
$13.45. SilverCrest maintained its strong balance sheet through
disciplined cost management and securing a $40 million credit facility
with Scotiabank. SilverCrest will continue to focus on delivering strong
operating results and optimizing our operating cash flow as we complete
the Santa Elena Expansion and increase production in 2014 to
approximately 3.3 million to 3.6 million silver equivalent ounces (Ag:Au
60:1)."
Fourth Quarter ended December 31, 2013
During the fourth quarter, the Company recorded a one-time non-cash
deferred tax accounting adjustment of $5.8 million as a result of the
enactment of the Mexican Tax Reform. The Company has taken the position
that the 7.5% mining royalty is an income tax in accordance with IFRS
for financial reporting purpose, as it is based on a measure of revenue
less certain specified costs. On substantial enactment, a taxable
temporary difference arises, as property, plant and equipment and
exploration and evaluation assets have book basis but no tax basis for
purposes of the royalty. The Company has recognized a deferred tax
liability of $5.8 million as at December 31, 2013 in respect of this
royalty. This deferred tax liability will be drawn down to $nil as a
reduction to tax expense over the life of mine as the Santa Elena Mine
and its related assets are depleted or depreciated.
Net loss was $4,094,410 ($0.04 per share basic) for the fourth quarter compared with net
earnings
of $13,616,028 ($0.14 per share basic) in 2012. The net loss in the
fourth quarter was primarily attributed to lower revenue resulting from
significantly lower realized prices and the non‐cash deferred tax
accounting adjustment of $5.8 million as a result of the recently
enacted Mexican Tax Reform.
Silver and gold revenue totaled $12,866,617, (2012 - $18,243,732)
in the fourth quarter. Silver sales were a quarterly record of 208,200
ounces including capitalized underground ounces (2012 - 171,714), 21%
higher than the same period in 2012. The foregoing, combined with a 37%
lower average realized price at $20 (2012 - $32) per ounce, resulted in
23% less silver revenue. Total gold sales were 8,220 ounces includes
capitalized underground ounces (2012 - 8,444) or 3% below 2012. The
Company sold 6,576 (2012 - 6,755) ounces of gold at an average realized
price of $1,250 (2012 - $1,706) per ounce. The foregoing, 27% decline in
realized price, combined with a decline in the ounces of gold sold,
resulted in 29% less gold revenue. The Company delivered 1,644 gold
ounces (2012 - 1,689) under the Sandstorm Purchase Agreement at $350 per
ounce.
Cost of sales amounted to $5,185,211 (2012 - $5,156,489). Cash cost
per silver equivalent ounce sold amounted to $7.68, Ag:Au 61.6:1 (2012 -
$8.05, Ag:Au 55.6:1). The decrease in cash cost per silver equivalent
ounce sold is driven generally by lower mining contractor costs related
to a reduction in waste removal. As the Santa Elena Open Pit nears the
end of its life, the strip ratio dropped to 1.63:1 in the fourth quarter
compared to 3.07:1 for the same period in 2012.
General and administrative expenses increased by 37% to $2,885,989
(2012 - $2,208,355) primarily due to an increase in remuneration and
other corporate expenses. Remuneration increased by 37% to $1,581,482
(2012 - $1,158,076) with the addition of new corporate personnel in Q1,
2013, and higher bonuses paid in December to management and employees.
Tradeshows and travel increased by 184% to $331,601 (2012 - $116,768)
due to an increase in trade show attendance and an accelerated investor
relations program.
Mexico corporate expenses increased by 47% to $259,488 (2012 - $176,440), with additional tax, legal and corporate activity.
Current income tax expense amounted to $1,580,000, compared to a
recovery of $3,494,000 in 2012. For fiscal 2012, the $23.2 million
Hedging Facility cash settlement was deductible for Mexican income
taxes. Deferred tax expense amounted to $5,420,000 (2012 - $781,000),
primarily attributed to a non‐cash accounting adjustment in relation to
the Mexican Tax Reform. On December 11, 2013, the Mexican government
enacted a tax reform to introduce a mining royalty effective January
2014.
Year ended December 31, 2013
Net earnings were $8,479,263 ($0.08 per share basic) for the year
ended December 31, 2013, compared with $30,475,744 ($0.33 per share
basic) in 2012. The decrease in net earnings was primarily driven by a
decrease in revenue resulting from lower realized prices and lower gold
sales combined with higher tax expense recorded compared with 2012
(attributed to the eligible deduction for income tax purposes in 2012 of
the Hedging Facility cash settlement and the non‐cash accounting
adjustment in 2013 of $5.8 million in relation to the Mexican Tax
Reform).
Silver and gold revenue totaled $54,893,651 (2012 - $70,520,085)
for fiscal 2013, which includes $53,354,062 (2012 - $63,456,934)
received on a cash basis.
SilverCrest sold 751,633 ounces of silver including capitalized
underground ounces (2012 - 588,312), 28% higher compared to fiscal 2012.
The foregoing, combined with a 27% lower average realized price at $23
(2012 - $32) per ounce, resulted in 7% less silver revenue for the year.
SilverCrest sold 30,487 ounces of gold including capitalized
underground ounces (2012 - 34,834), 12% lower than fiscal 2012. From
this total, the Company sold 24,389 (2012 - 21,383) ounces of gold at an
average realized price of $1,392 (2012 - $1,703) per ounce. The
foregoing, 18% decline in realized price resulted in 7% less gold
revenue than in 2012. The Company delivered 6,097 gold ounces (2012 -
6,967) to Sandstorm at $350 per ounce, and, as the MBL Hedge Facility
was settled in 2012, there were no gold deliveries (2012 - 6,484) at
$926.50 per ounce.
Cost of sales amounted to $19,895,374 (2012 - $18,307,681). Cash
cost per silver equivalent ounce sold amounted to $7.78, Ag:Au 60.5:1
(2012 - $7.39, (Ag:Au 54.3:1), 2013 corporate market guidance estimate
was $8.50 per silver equivalent ounce, (Ag:Au 55:1). The increase in
2013 cash cost per silver equivalent ounce sold was driven by higher
mining contractor costs, higher processing expenses, and greater general
administrative costs from annual salary and benefit increases for mine
site personnel.
All-in sustaining cash cost per silver equivalent ounce sold was
$13.05, Ag:Au 60.5:1. Company guidance for 2013 was $13.45 per silver
equivalent ounce sold.
Current income tax expense amounted to $5,450,000 (2012 -
$4,156,000), which relates to the estimate of annual tax payable from
Santa Elena operations. The Company has paid a total of $4.7 million
related to 2013 income taxes, $3.1 million by offset of Mexican value
added taxes receivable, and $1.6 million by offset of 2012 income taxes
refund. Deferred tax expense amounted to $7,418,000 (2012 - $1,261,000),
primarily attributed to a non ‐ cash accounting adjustment of $5.8
million in relation to the Mexican Tax Reform and recognizing an income
tax deduction on 2013 Santa Elena exploration drilling and related
costs, which were capitalized for book purposes.
Exchange loss on translation to United States dollars amounted to
$1,989,460 (versus an exchange gain of $561,523 in 2012), due to the
significant weakening of the Canadian dollar against the United States
dollar during fiscal 2013. The financial results of the Company’s
Canadian operations were translated at US$1.00 = CAD$0.9949 at December
31, 2012, and US$1.00 = CAD$1.0636 at December 31, 2013.
OUTLOOK FOR 2014
Santa Elena Targets
- Achieve estimated 2014 production guidance of 1.3 million – 1.5
million ounces of silver and 34,000 – 36,000 ounces of gold, for an
aggregate of 3.3 million – 3.6 million ounces of silver equivalent,
Ag:Au 60:1.
- Achieve estimated cash operating cost of $8.50 - $9.50 per silver equivalent ounce sold, Ag:Au 60:1.
- Complete construction of new conventional 3,000 tpd CCD/MC mill facility in early Q2 2014 - Budget for 2014 is $14 million.
- Complete underground decline development of main ramp to enable
physical access to ore starting on level 525m -Budget for 2014 for
underground development and equipment purchases is $12 million.
Sonora Project Targets
- Ermitaño Property – initial mapping, sampling and exploration drilling of targets - Budget for 2014 is $550,000.
La Joya Project Targets
- Complete evaluation of certain technical aspects of the project to Pre Feasibility Study level.
- Complete a core drilling program of approximately 20 holes for
in-fill drilling of preliminary pit-constrained resources (Preliminary
Economic Assessment level) with subsequent metallurgical work. Budget
for 2014 is $1 million.
- Complete staged payments of $1.8 million under the La Joya
agreements to acquire 100% of the 12 mineral concessions under option.
The Qualified Person under National Instrument (NI 43-101)
Standards of Disclosure for Mineral Projects for this News Release is N.
Eric Fier, CPG, P.Eng, President and Chief Operating Officer for
SilverCrest Mines Inc., who has reviewed and approved its contents.
SilverCrest Mines Inc. (TSX: SVL; NYSE MKT: SVLC)
is a Canadian precious metals producer headquartered in
Vancouver,
BC. SilverCrest’s flagship property is the 100%-owned Santa Elena Mine,
located 150 km northeast of Hermosillo, near Banamichi in the State of
Sonora, México. The mine is a high-grade, epithermal silver and gold
producer, with an estimated life of mine of 8 years and cash costs of
$11 per ounce of silver equivalent (55:1 Ag:Au) for the open pit heap
leach and underground mine. SilverCrest anticipates that the new 3,000
tonnes per day conventional mill facility at the Santa Elena Mine should
recover an average annual rate of 1.5 million ounces of silver and
32,800 ounces of gold over the current reserve. Major expansion and
construction of the 3,000 tonnes per day conventional mill facility is
nearing completion and is expected to significantly increase metals
production at the Santa Elena Mine (open pit and underground) in 2014
and beyond. Exploration programs continue to make new discoveries at
Santa Elena and also have rapidly advanced the definition of a large
polymetallic deposit at the La Joya property in Durango State with
stated resources nearing 200 million ounces of Ag equivalent.
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. Such forward-looking
statements concern the Company’s anticipated results and developments in
the Company’s operations in future periods, planned exploration and
development of its properties, plans related to its business and other
matters that may occur in the future. These statements relate to
analyses and other information that are based on expectations of future
performance, including silver and gold production and planned work
programs. Statements concerning reserves and mineral resource estimates
may also constitute forward-looking statements to the extent that they
involve estimates of the mineralization that will be encountered if the
property is developed and, in the case of mineral reserves, such
statements reflect the conclusion based on certain assumptions that the
mineral deposit can be economically exploited.
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
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 to raise financing and 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; risks related to governmental regulations and
obtaining necessary licenses and permits; risks related to the business
being subject to environmental laws and regulations which may increase
costs of doing business and restrict our operations; risks related to
mineral properties being subject to prior unregistered agreements,
transfers, or claims and other defects in title; risks relating to
inadequate insurance or inability to obtain insurance; risks related to
potential litigation; risks related to the global economy; risks related
to the Company’s status as a foreign private issuer in the United
States; risks related to all of the Company’s properties being located
in Mexico and El Salvador, including political, economic, social and
regulatory instability; and risks related to officers and directors
becoming associated with other natural resource companies which may give
rise to conflicts of interests. 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 information provided in this news release is not intended to be
a comprehensive review of all matters and developments concerning the
Company. It should be read in conjunction with all other disclosure
documents of the Company. The information contained herein is not a
substitute for detailed investigation or analysis. No securities
commission or regulatory authority has reviewed the accuracy or adequacy
of the information presented.
Contact:
Fred Cooper (Investor Relations)
J. Scott Drever (CEO)
Telephone: (604) 694-1730
Fax: (604) 694-1761
Toll Free: 1-866-691-1730
Email:
info@silvercrestmines.com
Website:
www.silvercrestmines.com
Address: Suite 501 - 570 Granville Street
Vancouver, BC Canada V6C 3P1
Published at Investorideas.com Newswire
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(1) Silver equivalent ("AgEq") ounces consist of the number of
ounces of silver production/sold plus the number of ounces of gold
production/sold multiplied by 60:1 gold price to silver price ratio, as
determined in the 2014 budget, prior to Q1 2014, the AgEq ratio was
based on the spot gold price to the spot silver price at the quarter end
dates for financial
All sample analyses were completed by ALS Chemex in Hermosillo, Mexico and North Vancouver, BC.