Vancouver, British Columbia - November 14, 2013 (Investorideas.com Mining Stocks Newswire) SilverCrest Mines Inc. (
TSX.V:SVL) (
NYSE MKT: SVLC) ("SilverCrest" or the "Company") is pleased to announce its
financial
results for the third quarter ended September 30, 2013. 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 unaudited condensed consolidated interim financial statements
for the three and nine months ended September 30, 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.
N. Eric Fier, President and COO stated; "During Q3, despite
sustained lower metal prices, SilverCrest generated strong positive cash
flows and net earnings. Our free cash flow continues to be reinvested
at Santa Elena as
capital
expenditures for the expansion plan with $14.4m invested in Q3.
Management continues to focus on improving operating performance and
profit margins especially in light of the new mining taxes currently
being legislated in Mexico. We remain on track to achieve or better our
cost guidance of $8.50 per silver equivalent ounce and production
guidance of 2.44 million ounces of silver equivalent (Ag:Au 55:1)."
FINANCIAL HIGHLIGHTS OF Q3, 2013, Compared to Q3, 2012:
- Cash flow from operations (1) decreased 30% to $7.1 million ($0.07 per share).
- Cash operating cost per silver equivalent ounce sold (2) increased 5% to $7.96.
- All-in sustaining cash costs per silver equivalent ounce sold (3) decreased by 23% to $10.41.
- Revenues reported - IFRS (4) decreased 18% to $13.7 million.
- Sales of 204,947 ounces of silver, another quarterly record, were up 35%.
- Sales of 7,522 ounces of gold were down 5%.
- Realized metal prices for ounces sold - silver price fell 31% to $22/oz and gold price fell 21% to $1,346/oz.
- Bullion inventory at September 30, 2013, included 53,131 ounces of silver and 1,819 ounces of gold.
- Net earnings amounted to $3.71 million ($0.03 per share), compared to $1.26 million ($0.01 per share).
- Cash and cash equivalents totaled $24.1 million (at September 30, 2013) after capital investments of $14.4 million.
- Working capital was $30.9 million at September 30, 2013.
COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2013 to SEPTEMBER 30, 2012;
Net earnings were $3,705,318 ($0.03 per share basic) for the third
quarter compared with $1,263,316 ($0.01 per share basic) in 2012. The
increase in net earnings during the quarter was primarily driven by the
elimination of the marked-to- market derivative impact from Hedge
Facility deliveries and lower income taxes in the period, partially
offset by a decrease in revenue resulting from significantly lower
realized prices and lower gold sales.
Silver and gold revenue totaled $13,669,133 (2012 - $16,694,752) in
the third quarter, which includes $13,104,527 (2012 - $15,469,381)
received on a cash basis.
Silver sales were another quarterly record of 204,947 ounces (2012 -
152,088), 35% higher than the same period in 2012. The foregoing,
combined with a 31% lower average realized price at $22 (2012 - $31) per
ounce, resulted in 7% less silver revenue.
Total gold sales were 7,522 ounces (2012 - 7,923) or 5% below 2012.
The Company sold 6,017 (2012 - 5,423) ounces of gold at an average
realized price of $1,346 (2012 - $1,707) per ounce, a 21% decline in
realized price resulting in 13% less gold revenue. The Company delivered
1,504 gold ounces (2012 - 1,585) under the Sandstorm Gold Ltd. Purchase
Agreement at $350 per ounce.
Cost of sales amounted to $5,293,749 (2012 - $4,239,773). Cash cost
per silver equivalent ounce sold amounted to $7.96, Ag:Au(2) 61.2:1
(2012 - $7.60, Ag:Au(2) 51.3:1). The increase in 2013 cash cost per
silver equivalent ounce sold is driven generally by higher operating
costs with increases in mining contractor costs, higher crusher
operating costs due to decreased throughput attributed to the effects of
the rainy season, and annual salary and benefit increases for mine site
personnel.
General and administrative expenses increased by 5% to $1,125,084
(2012 - $1,070,468) primarily due to an increase in remuneration,
professional fees and Mexico corporate expenses. Remuneration increased
by 23% to $465,050 (2012 - $379,081) with the addition of new corporate
personnel in Q1, 2013, and increased compensation for management and
other employees effective January, 2013. Professional fees increased by
51% to $158,231 (2012 - $104,803) due to additional legal fees relating
to various corporate matters. Mexico corporate expenses increased by 75%
to $177,318 (2012 - $101,056), with additional tax and legal expenses.
Deferred tax expense amounted to $663,000 (2012 - $189,000),
primarily due to recognizing an income tax deduction on 2013 Santa Elena
exploration drilling and related costs, which resulted in reducing the
Mexican tax basis compared with the financial statement carrying book
value.
Exchange gain on translation to US Dollars amounted to $459,247
(2012 - $949,838) due to the strengthening in the third quarter of the
Canadian
dollar against the US dollar. The financial results of the Company's
Canadian operations were translated at US$1.00 = CAD$1.0512 at June 30,
2013 and US$1.00 = CAD$1.0285 at September 30, 2013.
(1) Cash flow from operations before
changes in working capital items. This is a Non-IFRS performance measure.
(2) Silver equivalent ("AgEq") ounces consist of
the number of ounces of silver sold plus the number of ounces of gold
sold multiplied by the ratio of the spot gold price to the spot silver
price at the quarter end dates (Q3 2013; 61.2:1, Q3 2012; 51.3:1).
(3) SilverCrest has started to report all-in
sustaining cash costs effective Q2, 2013. All-in sustaining cash costs
includes cost of sales, general and administrative expenses, sustaining
capital and exploration expenditures at the Santa Elena Mine. This is a
Non-IFRS performance measure.
(4) The MBL Hedging Facility was fully repaid in fiscal 2012, so this non-cash adjustment has now been eliminated.
NON-IFRS PERFORMANCE MEASURES
The discussion of financial results in this press release includes
reference to "cash flows from operations before changes in working
capital items", "cash operating cost per silver equivalent ounce sold"
and "all-in cash cost per silver equivalent ounce sold", which are
non-IFRS performance measures. The Company presents these measures to
provide additional information regarding the Company's financial results
and performance. Please refer to the Company's MD&A for the three
and nine months ended September 30, 2013, for a reconciliation of these
measures to reported IFRS results.
OUTLOOK
SANTA ELENA OPERATIONS
SilverCrest's immediate focus is to continue its efficient
operation of its flagship Santa Elena low cost open pit silver and gold
mine. Operations are running smoothly with open pit producing high grade
benches with gold and silver grades reaching daily highs of 5.8 gpt and
175 gpt respectively. The Company is confident that it will achieve
market guidance production costs of less than $8.50 per ounce AgEq and
metal production for 2013 of 30,000 ounces of gold and 725,000 ounces of
silver.
SANTA ELENA EXPANSION PLAN
Construction of the 3000 tpd conventional mill and facilities is
proceeding according to schedule with the exception of delivery of the
ball mill from the manufacturer. The mill is expected to arrive on site
the last week of November resulting in a possible delay of initial start
up until February. Production from the open pit heap leach portion of
operations will continue until the mill is fully operational.
Underground development of the Santa Elena Main Zone is proceeding
on schedule with development of the zone being established at several
levels for the initial production stopes. Detailed mine plans are being
finalized that will optimize grade and ore recovery.
CORPORATE
Mexico is pursuing changes to its tax laws that would impact the
financial performance of the Company. Among several other tax changes
and administrative proposals, the Mexican government intends to initiate
a 0.5% royalty on gross revenues from the sale of gold and silver and a
7.5% royalty on earnings before interest, tax, depreciation and
amortization ("EBITDA"). The Company is working with its tax and legal
advisors to determine the ultimate impact of the changes in order to
mitigate the overall impact.
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 VENTURE: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 cash cost of US$8 per ounce of
silver equivalent (55:1 Ag: Au). SilverCrest anticipates that the 2,500
tonnes per day open pit heap leach facility at the Santa Elena mine
should recover approximately 625,000 ounces of silver and 33,000 ounces
of gold in 2013. Major expansion and construction of a 3000 tonnes per
day conventional mill facility is underway to significantly increase
metals production at the Santa Elena Mine (open pit and underground) by
2014. 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.
N. Eric Fier
N. Eric Fier, President and COO
SILVERCREST MINES INC.
Contact:
SilverCrest Mines Inc.
Fred Cooper
(604) 694-1730 ext. 108
Toll Free: 1-866-691-1730
(604) 694-1761
info@silvercrestmines.comwww.silvercrestmines.com
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(as defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
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All sample analyses were completed by ALS Chemex in Hermosillo, Mexico and North Vancouver, BC.