Mining
Stocks News: SilverCrest (TSX: SVL) (NYSE MKT: SVLC) Reports Q3 2014 Financial
Results
Cash Flow from
Operations of $2.3 million, Net Earnings of $0.2 million
Vancouver, BC - November 13, 2014 (Investorideas.com Mining
Stocks Newswire) SilverCrest Mines Inc. (TSX:SVL) (NYSE
MKT: SVLC) is pleased to announce its financial results for the third
quarter ended September 30, 2014. 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 nine months ended September 30, 2014, 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; "The third
quarter was another significant quarter for SilverCrest as we continue our
transition at the Santa Elena Mine from open pit heap leach to underground
mining and milling operations. In the third quarter, we successfully
commissioned Santa Elena's new 3,000 tonnes per day CCD/MC processing facility
and achieved record silver equivalent ("AgEq"(2)) production. We
continue to show positive cash flow from operations in spite of declining metal
prices. Financial results were also impacted by IFRS accounting requirement to
capitalize sales of silver and gold ounces and related expenses while
SilverCrest's expansion assets are being commissioned. The Company's fourth
quarter financial results will not be significantly impacted by capitalized
sales and related costs as Santa Elena's Expansion is now fully commissioned.
Our focus continues on operating efficiencies, cost control measures and
maintenance of a strong balance sheet to withstand metal price volatility.
Based on the production outlook for the fourth quarter, the Company expects to
meet its operating cash cost, all-in sustaining cash cost and production
guidance for 2014. Our nine month operating cash flow was $11.97 million with
an operating cash cost of $8.19 and all-in sustaining cash cost of $12.01 per
silver equivalent ounce sold (2) which continues to makes us one of the lowest
cost producers of precious metals."
FINANCIAL HIGHLIGHTS OF Q3, 2014,
Compared to Q3, 2013:
·
Cash flow
from operations (1)(2) was $2.3 million ($0.02 per share), decrease of 67%.
·
Cash
operating cost per AgEq ounce sold (2) was $10.30, increase of 29%.
·
All-in
sustaining cash cost per AgEq ounce sold (2) was $14.99, increase of 43%.
·
Reported
revenue was $8.0 million after capitalizing $7.5 million sales, decrease of
41%.
·
Metal
sales of 393,860 ounces of silver and 7,317 ounces of gold increased 92% and
decreased 3%, respectively.
·
Realized
spot metal prices declined from $21.85 to $18.78 (14%) for silver and from
$1,346 to $1,251 (7%) for gold.
·
Net
earnings were $0.2 million ($0.00 per share), compared to $3.7 million ($0.03
per share).
·
Adjusted
earnings were $3.6 million ($0.03 per share), compared to $4.1 million ($0.04
per share).
·
Cash and
cash equivalents increased to $37.7 million (at September 30, 2014), compared
to $24.1 million (at September 30, 2013).
·
Working
capital increased to $45.1 million (at September 30, 2014), compared to $30.9
million (at September 30, 2013).
·
Bullion
inventory at September 30, 2014, included 56,890 (2013 - 53,131) ounces of
silver and 1,045 (2013 - 1,819) ounces of gold.
Comparison
of the Three Months Ended September 30, 2014, to September 30, 2013
Net
earnings were $0.2 million ($0.00 per share basic) for the third quarter
compared with $3.7 million ($0.03 per share basic) in 2013. The earnings
decrease is primarily attributed to declining realized metal prices and the
accounting requirement to capitalize sales of silver and gold ounces and
related expenses while SilverCrest's expansion assets were being commissioned.
During the third quarter, SilverCrest capitalized sales of $7.5 million, or 48%
of its total $15.5 million third quarter sales.
Adjusted
earnings (2) were $3.6 million ($0.03 per share) for the third quarter compared
with $4.1 million ($0.04 per share basic) in 2013. Adjusted earnings exclude
deferred revenue, deferred tax expense and share based compensation.
Silver
sales totalled 393,860 ounces (2013 - 204,947), which includes 189,499
capitalized pre-commissioning ounces, a 92% increase over the same period in
2013. The foregoing, combined with a 14% lower average realized price of $18.78
(2013 - $21.85) per ounce, resulted in only 65% higher silver revenue. Total
gold revenue reported in the third quarter decreased 11% compared to the same
period in 2013. Total gold sales were 7,317 ounces (2013 - 7,522), which
includes 3,546 capitalized pre-commissioning ounces, or 3% below the same
period in 2013. The Company sold 5,854 (2013 - 6,017) ounces of gold at an
average realized price of $1,251 (2013 - $1,346) per ounce, a 7% decline. The
Company delivered 1,463 gold ounces (2013 - 1,504) under the Sandstorm Purchase
Agreement at $354 (2013 - $350) per ounce.
Cost of
sales amounted to $4,435,715 (2013 - $5,293,749). Cash operating cost and
all-in sustaining cash cost per AgEq ounce sold (2) in Q3 2014 were $10.30 and
$14.99 (Ag:Au 60.0:1) per ounce, respectively, compared to $7.96 and $10.49
(Ag:Au 61.2:1) per ounce in Q3 2013.
The
higher costs per ounce in the third quarter are mainly due to additional processing
costs resulting from Santa Elena's transition from a heap leach processing
operation to a milling operation. The mine remains focused on costs and further
operational efficiencies that will allow us to achieve our annual cost
guidance:
·
cash
operating cost of $8.50 - $9.50 per AgEq ounce sold(2)(9 months; $8.19).
·
all-in
sustaining cash costs of $11 - $12 per AgEq ounce sold(2)(9 months; $12.01).
General
and administrative expenses increased by 15% to $1,298,280 (2013 - $1,125,084)
primarily due to an increase in Mexico corporate expenses. Mexico corporate
expenses increased by 62% to $287,209 (2013 - $177,318), with additional
Corporate Social Responsibility ("CSR"), tax, and legal activity.
(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". 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 a 60:1 gold price to
silver price ratio. Prior to January 1, 2014, the AgEq ratio was based on the
spot gold price to the spot silver price at the quarter end dates for financial
reporting. At Q3, 2013, the gold price to silver price ratio was 61.2:1. All
numbers are rounded.
OPERATIONS UPDATE
Most of
the focus at Santa Elena is currently on underground performance. The
underground is currently averaging ore production of 450 tonnes per day with an
expectation to achieve over 500 tonnes per day by year end. The Company is
currently mining its first stope ("Stope #1") which contains
approximately 40,000 ore tonnes. An estimated 20% of the stope has been mined
and preliminary grade reconciliation shows higher than expected silver and gold
grades. Stope #1 will be key to better understanding grade distribution and
reconciliation, dilution, stope geotechnical constraints and mining costs.
The new
CCD/MC processing facility is currently running at nameplate capacity of 3,000
tonnes per day. October average mill throughput was 2,750 tonnes per day.
Current recoveries are at or above projected numbers of 92% for gold and 67.5%
for silver. A detailed mass balance is currently underway to better determine
percent recoveries.
Permission
has been granted to reopen the Santa Elena pit which currently has an estimated
75,000 to 100,000 ore tonnes, grading 1.4 gpt Au and 88.0 gpt Ag. The Company
is preparing for this re-opening in a safe and orderly manner. Depending on the
timing for pit ramp clean up with geotechnical remediation, high grade low
strip production (est. 1,000 tonnes per day) should start from the pit in late
Q4 2014 or early 2015 and continue for three to six months.
OUTLOOK
SilverCrest's
immediate focus is to (i) continue the efficient operation of its flagship
Santa Elena low cost silver and gold mine, (ii) increase current underground
ore production rates from an average of 450 tonnes per day to in excess of
1,000 tonnes per day in H1 2015, (iii) expand resources and associated
subsequent reserves at Santa Elena by systematic exploration of the deposit,
(iv) continue and acquire exploration properties in proximity to Santa Elena
and drill test some targets in Q4 2014, (v) complete evaluation of certain
aspects of the La Joya Project to a Pre Feasibility Study level in 2015.
Q3 FINANCIALS CONFERENCE CALL
A
conference call to discuss the results for the unaudited Q3 2014 financials
will be held on Thursday, November 13, 2014. The call will be held at 10am PDT
(1pm EDT). To participate in the conference call, please dial the following:
Participant
Dial-In Number(s)
Local / International: 1-647-427-3415
North American Toll- Free: 1-888-241-0551
A replay
of the conference call will be archived for later playback on the Company's
website at www.silvercrestmines.com.
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 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 at an average operating cash costs of $11 per ounce of silver
equivalent (55:1 Ag:Au). SilverCrest anticipates that the new 3,000 tonnes per
day conventional mill facility at the Santa Elena Mine should recover an
average of 1.5 million ounces of silver and 32,800 ounces of gold per annum
over the current reserve life. Major expansion and commissioning of the 3,000
tonnes per day conventional mill facility is complete and is expected to
increase metals production at the Santa Elena Mine in the second half of 2014
and beyond. Exploration programs continue to result in 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, 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. 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 and 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; the amount 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
processing recoveries; cash operating costs and outflows; life of mine;
anticipated free cash flow generation; 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:
the presence of and continuity of metals at the Company's projects; cost of
production and productivity levels; plant and equipment function as
anticipated; the availability of skilled labour; contracted parties provide
goods and services on agreed time frame; ability to develop and finance
projects; accuracy of the interpretations and assumptions used in calculating
reserve and resource estimates; and operations not being disrupted or delayed
by unusual geological or technical problems.
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 environmental laws; 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 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 REGARDING
NON-IFRS PERFORMANCE MEASURES
This news
release includes the term "Free cash flow". This term is commonly
used in the mining industry but is not defined under International Financial
Reporting Standards ("IFRS"). 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. 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. Free cash flow is calculated from net cash
provided by operating activities less SilverCrest's capital expenditures on its
mining interests.
Contact:
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