TSX: SVL NYSE MKT: SVLC
VANCOUVER, May 13, 2015 /PRNewswire/ - SilverCrest
Mines Inc. (the "Company" or "SilverCrest") is pleased to announce
its consolidated interim financial results for the first quarter
("Q1") ended March 31, 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 months ended March
31, 2015 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.
FINANCIAL HIGHLIGHTS OF Q1, 2015, COMPARED TO Q1,
2014
- Cash flow from operations (1)(2) was
$7.3 million ($0.06 per share, basic and diluted), an increase
of 10%.
- Cash operating cost per AgEq ounce sold (2)(3) was
$8.49, an increase of 28%.
- All-in sustaining cash cost per AgEq ounce sold
(2)(3) was $11.25, an
increase of 25%.
- Revenues increased 50% to $19.5
million.
- Metal sales of 413,250 ounces of silver and 11,748 ounces of
gold increased 108% and 54%, respectively.
- Realized average spot metal prices declined from $20.70 to $16.62 (20%) for silver and from
$1,319 to $1,196 (9%) for gold.
- Net earnings remained consistent at $2.5
million ($0.02 per share,
basic and diluted).
- Adjusted earnings (2) increased 48% to $4.0 million ($0.03
per share, basic and diluted).
- Cash and cash equivalents totalled $35.2
million (at March 31, 2015),
compared to $54.5 million (at
March 31, 2014).
- Working capital was $45.4 million
(at March 31, 2015), compared to
$63.7 million (at March 31, 2014).
- Bullion inventory at March 31,
2015 included 82,445 (2014 – 59,114) ounces of silver and
2,524 (2014 – 2,084) ounces of gold.
- Scotiabank Credit Facility $15.0
million drawn from $30.0
million available (at March 31,
2015).
J. Scott Drever, Chief
Executive Officer, stated; "We are pleased with the strong
start to 2015. Santa Elena's
record AgEq (3) production delivered solid Q1, 2015
financial results, generating cash flow from operations
(1)(2) of $7.3
million and net earnings of $2.5
million. We are confident in Santa
Elena's ability to continue to generate positive cash flows
during 2015, notwithstanding the lower precious metals price
environment. We are pleased our tight cost control measures and
record production resulted in cash operating cost
(1)(2) of $8.49
per AgEq (3) ounce sold and all-in sustaining cash
cost (2) of $11.25
per AgEq(3) ounce sold. These cash operating numbers
came in below our annual cost guidance range and continue to make
us one of the lowest cost precious metal producers. We continue to
have a strong balance sheet at the end of Q1, 2015 with
$35.2 million in cash and cash
equivalents, working capital of $45.4
million and undrawn credit facility of $15 million. SilverCrest is well situated to
further strengthen its balance sheet in the upcoming quarters as
underground production rates and grades continue to improve and
mill recoveries rates continue above 92% for gold and 75% for
silver. SilverCrest maintains its 2015 corporate production
guidance range of 4.0 – 4.4 million AgEq (3) ounces for
2015".
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FINANCIAL AND
OPERATING HIGHLIGHTS:
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Q1
2015
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Q1
2014
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Cash flow from
operations (1) (2)
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$
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7,255,215
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$
|
6,597,397
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Cash flow from
operations (1)(2) per share
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$
|
0.06
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$
|
0.06
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Cash operating cost
per silver equivalent ounce sold (2) (3)
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$
|
8.49
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$
|
6.63
|
All-in sustaining
cash cost per silver equivalent ounce sold (2)
(3)
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$
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11.25
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$
|
9.01
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Revenues
|
$
|
19,512,360
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$
|
13,005,527
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Cost of
sales
|
$
|
(10,157,498)
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$
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(4,686,523)
|
Depletion,
depreciation and amortization
|
$
|
(3,013,434)
|
$
|
(1,721,406)
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Mine operating
earnings
|
$
|
6,341,428
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$
|
6,597,598
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Other net
expenses
|
$
|
(1,835,232)
|
$
|
(1,403,161)
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Foreign exchange
loss
|
$
|
(333,615)
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$
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(485,448)
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Tax
expense
|
$
|
(1,661,000)
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$
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(2,241,000)
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Net earnings and
comprehensive earnings
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$
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2,511,581
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$
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2,467,989
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Weighted average
number of common shares outstanding
|
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118,753,205
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111,315,927
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Earnings per share –
basic
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$
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0.02
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$
|
0.02
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Earnings per share –
diluted
|
$
|
0.02
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$
|
0.02
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Adjusted earnings per
share (2)
|
$
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0.03
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$
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0.02
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Silver ounces
sold
|
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413,250
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198,800
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Gold ounces
sold
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11,748
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7,650
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Silver equivalent
ounces sold (3)
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1,196,842
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709,055
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Ag : Au Ratio
(3)
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66.7:1
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66.7:1
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(1)
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Cash flow from
operations before changes in working capital items.
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(2)
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These are Non-IFRS
performance measures. Refer to "CAUTIONARY NOTE REGARDING
NON-IFRS PERFORMANCE MEASURES".
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(3)
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Silver equivalent
("AgEq") ratio for Q1, 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.
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Comparison of the Three Months Ended March 31, 2015, to March
31, 2014
Net earnings were $2,511,581
($0.02 per share basic and diluted)
for the first quarter compared with $2,467,989 ($0.02
per share basic and diluted) in the first quarter of 2014. The
small increase in net earnings in the first quarter was primarily
attributed to a significant increase in ounces produced offset by
lower metal prices and an increase in mine operating costs.
Silver and gold revenue amounted to $19,512,360 (2014 – $13,005,527) in the first quarter. Silver sales
totalled 413,250 ounces (2014 – 198,800), 108% higher than the same
period in 2014. The foregoing, combined with a 20% lower average
realized price of $16.62 (2014 –
$20.70) per ounce, resulted in 67%
more silver revenue. Total gold revenue in the first quarter
increased 42% compared to the same period in 2014. Total gold sales
were 11,748 ounces (2014 – 7,650) or 54% above 2014. The Company
sold 9,524 (2013 – 6,120) ounces of gold at an average realized
price of $1,196 (2014 – $1,319) per ounce, a 9% decline, and delivered
2,224 gold ounces (2014 – 1,530) under the Sandstorm Purchase
Agreement at $354 per
ounce.
Cost of sales amounted to $10,157,498 (2014 – $4,686,523). Cash operating cost and all-in
sustaining cash cost per AgEq ounce sold in Q1, 2015 were
$8.49 and $11.25 (Ag:Au 66.7:1) per ounce, respectively,
compared to $6.63 and $9.01 (Ag:Au 66.7:1) per ounce in the comparable
2014 quarter. The increase in cash operating cost per AgEq ounce
sold for Q1, 2015, is a result of additional direct production
costs due to the transition of Santa
Elena during 2014 from an open pit heap leach operation to
an underground mining and milling operation. The increase in all-in
sustaining cash operating cost per AgEq ounce sold for Q1, 2015, is
a result of higher production costs and the inclusion of
Santa Elena's sustaining
underground development, infrastructure and equipment costs. The
first two quarters of 2015 are estimated to be the lower cash cost
quarters while SilverCrest mines the remaining open pit reserves at
Santa Elena. The Company may
revise its cost guidance at the end of Q2, 2015, but currently
expects its average 2015 cash cost to range $10 – $11 per AgEq
ounce sold and average all-in sustaining cash cost to range
$14 – $15 per AgEq ounce sold. Cash operating costs for
Q1, 2015 experienced a favourable foreign exchange effect, as the
quarterly average Mexican Peso rate weakened against the U.S.
Dollar by 13% compared to Q1, 2014. Approximately 50% of Q1, 2015
cash operating costs are in Mexican Pesos. (Refer to "Cautionary
Note Regarding Non-IFRS Performance Measures").
Depletion, depreciation and amortization increased to
$3,013,434 (2014 – $1,721,406) 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 Q1 2014.
Current income tax expense amounted to $97,000 (2014 – $2,243,000). The decrease in income tax expense
compared with Q1, 2014, is primarily attributable to the Company
taking a 100% tax deduction for development costs incurred at
Santa Elena.
Deferred tax expense amounted to $1,564,000 (2014 – recovery $2,000). The increase in deferred tax expense is
primarily due to differences between the financial statement
carrying amounts and the respective Mexican tax bases resulting
from the development cost deductions taken for income tax
purposes.
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
underground ore production rates to 1,500 tpd by the end of 2015 to
achieve an average rate of 1,320 tpd for fiscal 2015, (iii) expand
resources and associated reserves at Santa Elena by continued systematic
exploration of the deposit, (iv) continue to evaluate and acquire
low cost exploration properties in proximity to Santa Elena, (v) update the La Joya resource model for a new resource
estimate in 2015, and (vi) manage a strong cash position to support
growth while sustaining existing operations.
Q1 FINANCIALS CONFERENCE CALL
A conference call to discuss the results for the 2015 first
quarter financial results will be held on Thursday, May 14, 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:
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1-416-764-8688
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Local –
Vancouver:
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1-778-383-7413
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North American
toll-free:
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1-888-390-0546
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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
processing recoveries; 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 three months ended March 31, 2015, for a reconciliation of these
measures to reported IFRS results.
SOURCE SilverCrest Mines Inc.