#Mining #Stock
News: SilverCrest (TSX: $SIL.TO; NYSE: $SILV) Announces Positive Feasibility
Study Results and Technical Report Filing for the Las Chispas Project; @SilverCrestMet
Vancouver, British Columbia - February 3, 2021 (Investorideas.com Newswire) SilverCrest Metals Inc. (TSX: SIL.TO; NYSE American: SILV) ("SilverCrest" or the "Company") is pleased to announce positive results from a Feasibility Study (the "Feasibility Study") for the Las Chispas Project ("Las Chispas" or the "Project") in Sonora, Mexico. Details of the Feasibility Study, including an updated Mineral Resource Estimate and an initial Mineral Reserve Estimate, are provided in a technical report filed under the Company's SEDAR profile entitled, "NI 43-101 Technical Report & Feasibility Study on the Las Chispas Project" with an effective date of January 4, 2021 (the "Technical Report"). The Technical Report has been prepared by Ausenco Engineering Canada Inc ("Ausenco") with the assistance of several other independent engineering companies and consultants.
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Highlights:
All
dollar ($) figures are presented in US dollars unless otherwise stated. Base
Case metal prices used in this analysis are $1,500 per gold ("Au")
ounce ("oz") and $19.00 per silver ("Ag") oz. These prices
are based on long-term consensus average prices. A silver equivalent
("AgEq")1 ratio of 86.9:1 (Au:Ag) applies throughout this news
release to Mineral Resources and Reserves, production and all-in sustaining
cost ("AISC") per oz. Net free cash flow and AISC are non-IFRS
measures. Refer to the Non-IFRS measures section of this news release.
- Robust Economics - The Feasibility Study considers a 1,250
tonne-per-day ("tpd") operation, with an initial mine life of
8.5 years. On an after-tax basis, Las Chispas generates a Base Case
NPV(5%) of $486.3 million ("M"), IRR of 52%, and a payback
period of 1.0 year. Using spot prices on the effective date of the
Technical Report ($1,946/oz Au and $27.36/oz Ag) the after-tax NPV(5%) is
$802.5 M, IRR is 74% and payback period is 0.7 year.
- High-Grade Updated Mineral Resource and Initial Reserve Estimate -
Initial Proven and Probable Reserves (3.35 M tonnes, grading 4.81 gpt Au
and 461 gpt Ag, or 879 gpt AgEq) total 94.7 Moz AgEq (Table 3). These
estimates place Las Chispas amongst the highest-grade primary silver projects
globally2. The mine plan excludes Inferred Resources (1.2 M tonnes grading
745 gpt AgEq totaling 29.7 M oz AgEq), which includes the recently
discovered high-grade Babi Vista Vein Splay ("BAVS") (211,400
tonnes grading 2,039 gpt AgEq totaling 13.9 Moz AgEq). Expansion and
infill drilling for BAVS is underway and targeted to be included in a
revised Mineral Resource and Reserve update in 2022.
- Enhanced Near Term Production Profile - The Feasibility Study
outlines average annual production of 12.4 Moz AgEq from 2023 through
2029, with net free cash flow beginning in 2023. Production will benefit
from improved metallurgical recoveries for Au and Ag of 97.6% and 94.3%,
respectively. This compares to 94.4% for Au and 89.9% for Ag reported in
the Preliminary Economic Assessment ("PEA"), titled,
"Technical Report and Mineral Resource Estimate for the Las Chispas
Property, Sonora, Mexico", effective date of May 15, 2019, as amended
July 19, 2019. Commissioning of the processing plant is targeted for Q2
2022 with ramp-up through H2 2022. It is anticipated that SilverCrest will
have accumulated 8 months (~300,000 tonnes) of mineralized material on
surface when the processing plant is expected to reach nameplate capacity
of 1,250 tpd, providing flexibility in the early stages of production.
- Lowest Quartile AISC - Average project-level life of mine
("LOM") AISC of $7.07/oz AgEq, and $6.68/oz AgEq over seven (7)
full years of production, positions Las Chispas amongst the lowest
quartile AISC globally3.
- Strong Capital Position, Formal Construction Decision - With the
completion of the Feasibility Study, SilverCrest's Board of Directors has
formally approved construction of the Project. The Company currently has
$125 M in cash as of January 31, 2021 and $90 M currently available under
its credit facility. Orders for critical long lead items have been placed
and all permits required to begin process plant construction are in hand.
- Opportunities to Grow and Optimize - Given that Las Chispas has
been advanced through the Feasibility Study stage within only five (5)
years of its discovery, numerous opportunities remain for growth and
optimization. The most significant opportunities are the potential to
expand and convert Mineral Resources, particularly for BAVS, Granaditas,
Babi Vista and Babicanora Norte veins, and the El Muerto Zone, all of
which are close to the planned underground development. Other notable
opportunities include optimization of the LOM grade profile and potential
acceleration of the mine ramp-up.
1
AgEq is based on an Au:Ag ratio of 86.9:1 calculated using $1,410/oz Au and
$16.60/oz Ag, with average metallurgical recoveries of 96% Au and 94% Ag.
2 Based on top 10 producing projects by 2019 silver production with public
disclosure on a primary silver basis from S&P Market Intelligence.
3 Based on data from S&P Market Intelligence, comparing to forecasted 2020
AISC for silver producers using the following metal prices: gold: US$1,500/oz,
silver: US$19.00/oz, lead: US$0.83/lb and zinc: US$1.03/lb).
Pierre
Beaudoin, COO, remarked, "The Las Chispas Feasibility Study defines a
project with robust economics and potential for further improvements during
operations. With our EPC Contract and underground development contracts in
place, initial construction is already underway and is expected to ramp up
through Q1, 2021. Our on-site team has been integral in advancing the study and
operating successfully under challenging conditions. The recent achievement of
completing more than 9,000 metres of underground mine development while
surpassing one million man-hours without a Lost-Time Injury is a testament to
our work force diligence to get the job done and continued commitment towards a
strong health and safety culture. We thank the team for the outstanding efforts
during a challenging year."
N.
Eric Fier, CPG, P.Eng and CEO commented: "We are thrilled to have
completed a robust Feasibility Study within five years of drilling the first
hole at Las Chispas. The Feasibility Study confirms what we have believed for a
while, that Las Chispas is economic as a stand-alone operation. It is important
to note that the Feasibility Study is just a snapshot in time. We are already
working hard to increase our high-grade reserves while simultaneously
constructing the mine and process plant. We are excited about the extensive
opportunities that remain to grow and optimize Las Chispas. We are greatly
appreciative of our employees, partners in the community, contractors and our
shareholders, who together have supported us to achieve this important
milestone safely, quickly and in a very capital efficient manner. While there
is a lot of hard work ahead of us, we look forward to making the shift to
production and cash flow which we expect will finance our continued
growth."
Further
details on the Feasibility Study are presented below.
Table 1: Feasibility Study Overview
The Feasibility Study presents a range of metal
pricing scenarios on a post-tax basis to evaluate the economics of the Project
in both upside and downside commodity price situations (Table 2). As
illustrated in the following table, the Project remains robust even at lower
commodity prices. Additional sensitivities are presented in the Technical
Report. The Project economics are most sensitive to precious metal prices.
Table 2: Sensitivity Analysis
Several
aspects of the Feasibility Study are similar to the PEA with respect to:
processed tonnes per year, mine life, contained ounces, processing costs,
G&A costs and closure costs. Using Feasibility Study Base Case metal
prices, the AISC, undiscounted LOM net free cash flow and payback period are
similar to those in the PEA. The most significant differences are increased
mineral resources, increased mineable grades, decreased mineable tonnes,
increased recoveries, more payable ounces, higher mining dilution, and higher
mining and capital costs. See further discussion below.
Mineral
Resource and Reserve Estimates
The
Mineral Resource Estimates were prepared by Yungang Wu, P. Geo., and Eugene
Puritch, P.Eng., from P&E Mining Consultants Inc. ("P&E") and
are provided in Table 3. Estimates were completed for potential underground
mining of in-situ vein deposits at the Las Chispas and Babicanora Areas and for
surface extraction of stockpiles from historical and current operations. All
drilling, surveying and assay databases were provided by SilverCrest including
data up to the cut-off date of October 16, 2020. Full details for the Mineral
Resource Estimate can be found in the Technical Report.
Table 3: Mineral Resource Estimate
Notes:
- Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability.
- The estimate of Mineral Resources may be materially affected by
environmental, permitting, legal, title, taxation, socio-political,
marketing, or other relevant issues.
- The Inferred Mineral Resource in this estimate has a lower level of
confidence than that applied to an Indicated Mineral Resource and must not
be converted to a Mineral Reserve. It can be reasonably expected that the
majority of the Inferred Mineral Resource could be upgraded to an
Indicated Mineral Resource with continued exploration.
- The Mineral Resources in the Report were estimated using the 2019
CIM Estimation of Mineral Resources & Mineral Reserves Best Practice
Guidelines and 2014 CIM Definition Standards for Mineral Resources &
Mineral Reserves.
- Historical mined areas were removed from the wireframes and block
model.
- AgEq is based on gold to silver ratio of 86.9:1 calculated using
US$1,410/oz Au and US$16.60/oz Ag, with average metallurgical recoveries
of 96% Au and 94% Ag using information available at the effective date of
October 16, 2020.
- Mineral Resources are inclusive of the Mineral Reserves.
- All numbers are rounded.
The
initial Mineral Reserve estimate was prepared by Carl Michaud, P.Eng.,
Underground Mining Engineer of G Mining Services Inc. ("GMS"), dated
of January 4, 2021.
Table 4: Mineral Reserve Estimate
Notes:
- The Mineral Reserve is estimated using the 2019 CIM Estimation of
Mineral Resources & Mineral Reserves Best Practice Guidelines and 2014
CIM Definition Standards for Mineral Resources & Mineral Reserves.
- The Mineral Reserve is estimated with a variable COG which was
calculated by vein width and economic and operating parameters.
- A government gold royalty of 0.5% is included in the Mineral
Reserve estimates.
- The Mineral Reserve is estimated with a mining recovery of 95%.
- The Mineral Reserve presented includes both internal and external
dilution. The external dilution included a mining dilution of 0.5 m width
on the hanging wall and footwall for the long hole mining method and a 0.2
m width on the hanging wall and footwall for the cut-and-fill and resue
mining methods. Backfill dilution is also included and represents an
average of 7% for the long hole mining method and an average of 10% for
cut-and-fill and resue mining methods.
- A minimum mining width of 1.5 m was used for the long hole and
cut-and-fill mining methods. A minimum mining width of 0.5 m was used for
the resue mining method.
- The economic viability of the Mineral Reserve has been
demonstrated.
- AgEq is based on gold to silver ratio of 86.9:1 calculated using
US$1,410/oz Au and US$16.60/oz Ag, with average metallurgical recoveries
of 96% Au and 94% Ag.
- Any discrepancies in the totals are due to rounding effects;
rounding followed the recommendations in the 2019 CIM Mineral Resources
& Mineral Reserves Best Practice Guidelines.
Production
Profile
Underground
mining will be completed using four (4) conventional mining methods (43% long
hole, 18% cut-and-fill uppers, 27% cut-and-fill breasting, and 12% resue).
Overall, underground mine dilution has been estimated to be 52%, mine recovery
to be 95%, with, on average, 23 active working faces. Underground development
and mining rates are scheduled to ramp-up at a measured pace through 2022 and
2023, with process plant feed during this period sourced from both underground
stopes and surface stockpiles (Figure 2). It is anticipated that SilverCrest
will have accumulated approximately 300,000 tonnes of mineralized material on
surface when the processing plant is expected to reach nameplate capacity,
providing flexibility in the early stages of production. This ramp-up profile
lowers the risk of start-up and minimizes sustaining capital investment at the
outset of the production. There is potential for these rates to be accelerated
with further optimization work.
Figure 2:
Material Movement Profile (CNW Group/SilverCrest Metals Inc.)
The Feasibility Study outlines an average
production profile of 12.4 Moz AgEq over the seven (7) full years of mine life,
with 2022 and 2030 as partial years of production due to ramp-up and ounces
produced at the end of the mine life. Average annual production over the full
LOM is 10.0 Moz AgEq. Further optimization may increase grade and ounces in the
earlier years of the LOM schedule.
Figure 3: Annual Production Profile
Figure 3: Annual Production Profile
(CNW Group/SilverCrest Metals Inc.)
Processing
and Recovery
Since
completing the PEA, additional metallurgical testing and process design were
concluded. This work highlighted the need for modifications to the process
flowsheet to address the presence of higher clay content and higher-grade
mineralized materials. The key changes to the circuit are the inclusion of a
SAG mill, flotation and corresponding split leach circuits, and larger
thickeners, clarifiers and filters. This work resulted in a more flexible
process plant and enhanced LOM metallurgical recoveries. LOM estimated
metallurgical recoveries post ramp-up are provided below (see details in Table
5).
Table 5: Metallurgical Recoveries
Initial
and Sustaining Capital Cost Estimates
The
Feasibility Study estimates initial capital requirements of $137.7 M and
sustaining capital of $123.9 M over the life of the mine (see details in Table
6). Excluded from the initial capital estimate is $25.8 M of sunk capital that
was spent prior to January 1, 2021, and relates to initial earthworks, Phase 1
of the construction camp, initial EPC milestone payment, and long-lead orders.
Also excluded from these estimates are $3.4 M in closure costs at the end of
production.
The
initial capital has increased from the PEA mainly due to the following:
COVID-19 related costs, underground mining infrastructures, process plant
modifications to accommodate higher grades and clay content, and the inclusion
of a power line to replace diesel-generated power.
Sustaining
capital is substantially higher than that in the PEA due to a combination of
upward revisions to the amount of underground development required based on
longer veins requiring more access and the applicable unit rate. This represents
the most significant change from the PEA in terms of capital expenditures.
Table 6: Capital Cost Estimates
Note: Numbers presented are rounded and columns may
not add to the sums.
As
announced in the Company's January 4, 2021 news release, one of SilverCrest's
Mexican subsidiaries has entered into a fixed price Engineering, Procurement
and Construction contract ("EPC Contract") with Ausenco and one of
its affiliates for construction of the process plant for a lump sum turnkey
price of $76.5 M with work expected to begin at the Project site in February
2021. The $76.5M price includes sunk capital and a proportionate share of
Contingency listed in Table 6. The contract was executed with approximately 60%
of detailed engineering being completed and procurement of long lead items
having started in Q4 2020.
Operating Costs
LOM
operating costs for the Project are estimated to average $118.49 per tonne
milled. When using the Base Case commodity price assumptions, the average LOM
in-situ contained metal value is approximately $515 per tonne milled. During
the start-up period, processing and general and administrative
("G&A") costs per tonne are higher until the process plant
throughput ramps up to design capacity. The Feasibility Study is based on
contractor underground mining, which has an estimated LOM cost of $71.40 per
tonne milled. LOM processing costs are estimated at $31.69 per tonne milled and
G&A costs are estimated at $15.40 per tonne milled.
Table 7: Operating Cost Breakdown
All-In Sustaining Costs per Ounce of Silver
Equivalent
AISC are estimated to be $7.07/oz AgEq produced,
based on LOM payable production of 90.3 Moz AgEq. During full years of
production, AISC is expected to average $6.68/oz AgEq produced. The break-down
of the components of the AISC for the Project are provided in Table 8.
Table 8: AISC Breakdown
Note that the above calculation does not include
corporate G&A costs or exploration expenditures for the Project.
Opportunities
Given the speed at which Las Chispas has been
advanced through the Feasibility Study stage, numerous opportunities remain for
optimization and growth. The most significant opportunities are as follows:
- Expansion of Mineral Resources and Conversion to Mineral Reserves - These areas will be advanced as part of the ongoing
exploration program, which will include underground in-vein development.
Priorities will be Babi Vista Vein Splay, Babi Vista Vein, Babicanora
Norte Vein, El Muerto Zone, and Granaditas 1 and 2 veins.
- Testing New Targets - As of
October 16, 2020, 45 veins have been identified, but only 21 have had
sufficient drilling to support at least an Inferred Mineral Resource
estimate. SilverCrest intends to target Mineral Resource additions from
these remaining veins and evaluate the significant potential to identify
additional veins through continued surface exploration and drilling
programs. Surface exploration and initial drill-testing has identified an
additional estimated 30 km of potential vein strike length to explore. The
Mineral Resource currently represents approximately 18 km of vein strike
length.
- Mine Optimization - Several
of the priority exploration opportunities in 2021 are within or close to
the proposed footprint of underground development. With successful
exploration and potential Mineral Reserve conversion, these opportunities
could allow for optimization of LOM, LOM grade and ramp-up profiles.
- Process Plant Capacity - The
Feasibility Study assumes a processing throughput of 1,250 tpd based on
the highest clay samples encountered during metallurgical testing. If it
is determined during operation that the clay content is lower than
assumed, daily throughput could be increased. There is also an opportunity
to complete a low capital cost expansion of the plant to 1,750 tpd, if
reserve tonnage and mining rates allow. This would include the addition of
a ball mill, pebble crusher and additional flotation capacity, with the
CCD circuit already sized for additional capacity. The 2021 budget will
include engineering work to support a capital cost estimate for the
expansion.
The suggested budget in the Feasibility Study for
work related to these opportunities is $39.2 M.
The Company intends to carry out an exploration and
mine optimization program in 2021 to address these opportunities which will
contribute to an updated Mineral Resource and Reserve Estimate currently
planned for 2022.
Risks
De-risking of Las Chispas has been a top priority
for the Company including significant work to finish the Feasibility Study,
completing over 9,000 m of underground development including in-vein drifting,
accumulating significant surface stockpiles of mineralized material, reaching
60% of detailed engineering, and installing an isolated construction camp to
limit the risk of COVID-19 during construction. Remaining risks include:
- COVID-19 - The
Company has made a substantial investment to address COVID-19 risks. This
includes the installation and operation of an isolated camp, quarantining
and testing prior to site access, random testing, and the implementation
of strict protocols. In addition, the company has established a COVID-19
taskforce mandated to monitor results and adapt protocols. Despite these
efforts, an outbreak at site remains possible and could disrupt
construction.
- Mineral Resource Estimates -
Las Chispas is a high-grade precious metal deposit and inherently has a
nugget effect which could cause overestimation of high-grade
mineralization when completing Mineral Resource estimation. Hard boundary
wireframes were used in estimation which helps restrict potential
overestimation of grades; however, wireframes may be biased with respect
to the representative volume, and subsequent estimated tonnage and metal
content.
- Mineral Reserve Estimates and Mine Plan - The main risks that can affect the Mineral Reserves are the
decrease in mining recovery and the increase in mining dilution due to the
narrow veins that make up the deposit. To mitigate this risk, the mine
design includes four mining methods and the ramp-up will take advantage of
the stockpile levels and be gradually increased to design level.
- Metallurgical Test work and Recovery Plan - There is a risk that high volumes of clay content materials may
cause reduced capacity through the tailings filters and greater moisture
in the dry-stack tailings facility. Planned mitigations include a
duty-standby design of the filters in the plant, and potential
reconfiguration of the dry stacking areas in the Filtered Tailings Storage
Facility (FTSF). Further characterization and management of clay before
production is also being planned as it also represents both a mitigation
measure and an opportunity.
About the Feasibility Study
Ausenco managed the Feasibility Study with several
other engineering companies and consultants contributing to sections of the
study. The following QPs contributed to the study:
- Ausenco - Mineral processing, recovery methods, infrastructure,
environmental, consolidated cost estimates and economic analysis
- Robin Kalanchey, P. Eng.
- Scott Weston, P. Geo.
- P&E - Geology and Mineral Resources
- William Stone, P.Geo.
- Eugene Puritch, P.Eng.
- David Burga, P. Geo.
- Jarita Barry, P.Geo.
- Yungang Wu, P.Geo.
- Andrew J. Turner, P. Geol.
- G-Mining Services - Mineral Reserves, mining, mine capital and
operating costs
- Carl Michaud, ING., P. Eng.
- Wood Environment & Infrastructure Solutions, Inc. - Tailings
- Humberto Preciado, PhD, P.E.
- Hydro-Ressources Inc. - Hydrology and Hydrogeology
- Michael Verreault, P.Eng.
- Rockland Ltd. - Geotechnical
- Khosrow Aref, P. Eng.
This news release has been reviewed and approved by
N. Eric Fier, CPG, P.Eng, CEO of SilverCrest and a Qualified Person as defined
by National Instrument 43-101 - Standards of Disclosure for Mineral Projects
("NI 43-101"). The technical information in this news release has
also been reviewed and approved by the following independent Qualified Persons:
- Robin Kalanchey, P. Eng.
- Eugene Puritch, P.Eng.
- Carl Michaud, ING., MBA
SilverCrest will be hosting a conference call on
February 3, 2021 at 5:30 am PST/8:30 am EST to discuss the results of the
Feasibility Study. An accompanying presentation will be uploaded to the
Company's website (www.silvercrestmetals.com/investors/presentation_factsheet/).
Access details for the call as follows:
- North American Toll-Free dial-in: 1-888-664-6392
- Webcast Access: https://produceredition.webcasts.com/starthere.jsp?ei=1424977&tp_key=8fd6c92776
- Encore North American Toll-Free Replay: 1-888-390-0541 Code:
511265#
ABOUT
SILVERCREST METALS INC.
SilverCrest
is a Canadian precious metals exploration and development company headquartered
in Vancouver, BC, that is focused on new discoveries, value-added acquisitions
and targeting production in Mexico's historic precious metal districts. The
Company's current focus is on the high-grade, historic Las Chispas mining
district in Sonora, Mexico. The Las Chispas Project consists of 28 mineral
concessions, of which the Company has 100% ownership of where all the resources
are located. SilverCrest is the first company to successfully drill-test the
historic Las Chispas Property resulting in numerous high-grade precious metal
discoveries. The Company is led by a proven management team in all aspects of
the precious metal mining sector, including taking projects through discovery,
finance, on time and on budget construction, and production.
This
news release contains "forward-looking statements" and
"forward-looking information" (collectively "forward-looking
statements") within the meaning of applicable Canadian and United States
securities legislation. These include, without limitation, statements with
respect to: the economics and project parameters presented in the Feasibility
Study, including IRR, AISC, NPV, and other costs and economic information;
mineral resource and mineral reserve estimates contained in the Technical
Report; possible events, conditions or financial performance that is based on
assumptions about future economic conditions and courses of action; the
strategic plans, timing and expectations for the Company's exploration,
development and construction activities at the Las Chispas Project. Such
forward looking statements or information are based on a number of assumptions,
which may prove to be incorrect. Assumptions have been made regarding, among
other things: impact of the COVID-19 pandemic; the reliability of
mineralization estimates, mining and development costs; the conditions in
general economic and financial markets; availability of skilled labour; timing
and amount of expenditures related to rehabilitation and drilling programs; and
effects of regulation by governmental agencies. The actual results could differ
materially from those anticipated in these forward-looking statements as a
result of risk factors including: uncertainty as to the impact and duration of
the COVID-19 pandemic; the timing and content of work programs; results of
exploration and development activities; the interpretation of drilling results
and other geological data; receipt, maintenance and security of permits and
mineral property titles; environmental and other regulatory risks; project cost
overruns or unanticipated costs and expenses; and general market and industry
conditions. Forward-looking statements are based on the expectations and
opinions of the Company's management on the date the statements are made. The
assumptions used in the preparation of such statements, although considered
reasonable at the time of preparation, may prove to be imprecise and, as such,
readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date the statements were made. The
Company undertakes no obligation to update or revise any forward-looking
statements included in this news release if these beliefs, estimates and
opinions or other circumstances should change, except as otherwise required by
applicable law
CAUTIONARY NOTE TO US INVESTORS
This
news release includes Mineral Reserves and Mineral Resources classification
terms that comply with reporting standards in Canada and the Mineral Reserves and
the Mineral Resources estimates are made in accordance with NI 43-101. NI
43-101 is a rule developed by the Canadian Securities Administrators that
establishes standards for all public disclosure an issuer makes of scientific
and technical information concerning mineral projects. These standards differ
significantly from the requirements of the SEC applicable to domestic United
States reporting companies. Consequently, Mineral Reserves and Mineral
Resources information included in this news release is not comparable to
similar information that would generally be disclosed by domestic US reporting
companies subject to the reporting and disclosure requirements of the SEC.
Accordingly, information concerning mineral deposits set forth herein may not
be comparable with information made public by companies that report in
accordance with US standards.
NON-IFRS MEASURES
SilverCrest
has included certain non-IFRS performance measures as detailed below. In the
mining industry, these are common performance measures but may not be
comparable to similar measures presented by other issuers. The Company believes
that, in addition to conventional measures prepared in accordance with IFRS,
certain investors use this information to evaluate the Company's performance
and ability to generate cash flow. Accordingly, it 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.
All-in
Sustaining Cash Costs per Ounce of AgEq - The Company defines AISC once in
production as the sum of operating costs (as defined and calculated above),
royalty expenses, sustaining capital, corporate expenses and reclamation cost
accretion related to current operations. Corporate expenses include general and
administrative expenses, net of transaction related costs, severance expenses
for management changes and interest income. AISC excludes growth capital,
reclamation cost accretion not related to current operations, interest expense,
debt repayment and taxes. For the purpose of the Feasibility Study, AISC does
not include corporate G&A and exploration expenditures for the Project.
While
there is no standardized meaning of the measure across the industry, the
Company's definition conforms to the all-in sustaining cost definition as set
out by the World Gold Council in its guidance dated June 27, 2013. The World
Gold Council is a non-regulatory, non-profit organization established in 1987
whose members include global senior mining companies. The Company believes that
this measure will be useful to external users in assessing operating
performance and the ability to generate free cash flow from current operations.
Net
Free Cash Flow - SilverCrest calculates net free cash flow by deducting cash
capital spending from net cash provided by operating activities. The Company
believes that this measure provides valuable assistance to investors and
analysts in evaluating the Company's ability to generate cash flow after
capital investments and build the cash resources of the Company. The most
directly comparable measure prepared in accordance with IFRS is net cash
provided by operating activities less net cash used in investing activities.
N. Eric Fier, CPG, P.Eng
Chief Executive Officer
SilverCrest Metals Inc.
SOURCE SilverCrest Metals Inc.
SilverCrest
Metals Inc. (TSXV: SIL.V; NYSE: SILV) is a featured company on Investorideas.com
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