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Guanajuato Silver Reports Q4 and Year End 2021 Financial Results

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Guanajuato Silver Reports Q4 and Year End 2021 Financial Results

 

 

 

 

 

Guanajuato Silver Company Ltd. (TSX-V:GSVR) (OTCQX:GSVRF) announces selected financial information and production results for the Company’s fourth quarter, and year ended December 31, 2021. The Company’s consolidated financial statements for the year ended December 31, 2021 and Management’s Discussion and Analysis thereon can be viewed at www.sedar.com. Production results are from the Company’s wholly owned El Cubo Mine Complex and El Pinguico project in Guanajuato, Mexico.

 

Selected 2021 Q4 Highlights:

 

(All figures in US Dollars)

 

  • All production results continue to be in-line with modelled ramp-up expectations.
  • Revenue from mining operations at El Cubo generated $4.1 million in Q4.
  • 105,203 ounces of silver and 1,179 ounces of gold were sold in Q4, totalling 199,526(1) silver-equivalent ounces (AgEq) sold at a realized silver price of $23.35(5) per ounce.
  • Q4 Cash Costs of $20.36(2) and AISC of $33.31(3) (Reflective of Company’s ongoing ramp-up).
  • December 31, 2021 cash balance of $8.23 million plus $1.6 million held as silver and gold bullion.

 

“2021 saw Guanajuato Silver successfully complete the transition from explorer to producer status”, said GSilver Chairman and CEO James Anderson. “Our revitalization of the El Cubo Mine represents an extremely efficient restart within our industry, as the Company continues to adhere to its ‘On Track, On Time, On Budget’ mantra. After purchasing the El Cubo mining complex in April 2021, we were mining and stockpiling mineralized material by August, processing that material in September, and had completed our first sale of precious metals concentrate before the end of October. Driven by ongoing sales of silver and gold and a ramp-up process that continues to unfold on plan, GSilver ended 2021 with a strong balance sheet and renewed confidence that we are moving towards becoming a significant Mexican mid-tier producer.”

 

Table of Selected 2021 Q4 and Year End Data:
(All figures in US Dollars)

 

Three Months Ended Year Ended
Dec 31
2021
Dec 31
2020
Dec 31
2021
Dec 31
2020
Revenue 4,116,811 nil 4,116,811 nil
Net loss (4,746,245 ) (913,110 ) (11,849,800 ) (1,721,817 )
Cost per tonne(4)(6) 63.35 79.10
Cash cost per AgEq ounce(1)(2)(6) 20.36 25.45
AISC per AgEq ounce(1)(3)(6) 33.31 73.70
Silver ounces sold 105,203 105,203
Gold ounces sold 1,179 1,179
Silver equivalent (“AgEq”) ounces sold(1) 199,526 199,526
Realized silver price per ounce(5) 23.35 23.35
  1. Silver equivalents are calculated using an 80:1 (Ag/Au) ratio.
  2. Cash cost per silver equivalent ounce includes mining, processing, and direct overhead. The production costs for the year ended December 31, 2021 include mining cost from July to September 2021, prior to the commencement of milling and concentrate production, and therefore differ from the production costs for the three months ended December 31, 2021. See Reconciliation to IFRS in the Company’s Management Discussion and Analysis.
  3. AlSC per oz include mining, processing, direct overhead, corporate general and administration expenses, on-site exploration, reclamation and sustaining capital. The production costs for the year ended December 31, 2021 include mining costs from July to September 2021, prior to the commencement of milling and concentrate production, and therefore differ from the production costs for the three months ended December 31, 2021. See Reconciliation to IFRS in the Company’s Management Discussion and Analysis.
  4. Production costs include mining, milling (including transportation and selling costs), and direct overhead at the operation sites. See Reconciliation to IFRS in the Company’s Management Discussion and Analysis.
  5. Based on provisional sales before final price adjustments, before payable metal deductions, treatment, and refining charges.
  6. These are non-IFRS financial measures and ratios. Further details on these non-IFRS financial measures and ratios are provided at the end of this press release and in the MD&A accompanying the Company’s financial statements on SEDAR at www.sedar.com.

 

Commercial production at the El Cubo Mine commenced on October 1, 2021, hence there are no previous comparable operational and financial results for the previous quarter or year-end periods. The Company generated revenue of $4.1 million for the 4th quarter and year ended December 31, 2021 on sales of 199,526(1) AgEq ounces at a realized price of $23.35(5) per ounce. AISC for Q4 and the year ended December 31, 2021 were $33.31(3) and $73.70(3) respectively, with the year ended December 31, 2021 AISC figure including costs from mid-July of 2021 as the Company commenced mining operations, expending $10.6 million on sustaining capital in the year end period, while sustaining capital of $2.2 million was expended in the 4th quarter of 2021.

 

Cash Balance

 

The Company continues to maintain ample financial liquidity and flexibility. The cash balance at year end totaled $8.23 million plus the Company had an additional $1.6 million held as silver and gold bullion.

 

Production Summary

 

A total of 89,082 tonnes were mined from El Cubo and from existing stockpiles at El Pinguico in Q4, with 77,524 tonnes milled resulting in the production of 124,750 ounces of silver and 1,440 ounces of gold; 80% of this production was sold in Q4. Average silver recoveries for this period were 82.9%, which is 96% of the target and historical recovery rate at El Cubo; gold recoveries averaged 78.8%, representing 90% of the target recovery rate. Q4 gold recoveries are reflective of the early stage of the ramp-up phase and demonstrate an opportunity for improved project economics with rising metallurgical recovery. Cash cost per silver-equivalent ounce(2) mined during Q4 was $20.36(3); cash cost per tonne mined in Q4 was $63.35(5); these numbers are in-line with the Company’s expectations and financial model.

 

Corporate Update

 

Guanajuato Silver Company Ltd. is pleased to announce the appointment of Israel Munoz as Vice-President of Finance for the Company. Mr. Munoz is a Chartered Professional Accountant (CPA-CA) with more than 20 years experience, including 10 years working for Canadian silver and gold producing companies operating in the USA, Mexico and Latin America. During this time, Mr. Munoz held progressively senior positions and played a key role in such companies’ debt and equity financings, and merger and acquisition activities, while leading initiatives on financial reporting, regulatory compliance, corporate governance, and commercial negotiations. Mr. Munoz was previously Corporate Controller of the Company. Prior to joining GSilver, he was Corporate Controller for Fortuna Silver Mines, and previously held senior leadership roles at Golden Queen Mining Co. and First Majestic Silver Corp. Mr. Munoz is a graduate of the National Autonomous University of Mexico.

 

Technical Information

 

Hernan Dorado Smith, a director and officer of GSilver and a “qualified person” as defined by National Instrument 43-101, Standards of Disclosure for Mineral Projects, has approved the scientific and technical information contained in this news release.

 

About Guanajuato Silver

 

GSilver is a precious metals producer engaged in reactivating past producing silver and gold mines near the city of Guanajuato, Mexico. The Company is currently producing silver and gold from its 100% owned El Cubo and El Pinguico projects, while simultaneously advancing the El Pinguico Mine to restart. Both projects are located within 11km of the city of Guanajuato, which has an established 480-year mining history.

 

Endnotes

  1. Silver equivalents are calculated using an 80:1 (Ag/Au) ratio.
  2. Cash cost per silver equivalent ounce includes mining, processing, and direct overhead. The production costs for the year ended December 31, 2021 include mining costs from July to September 2021, prior to the commencement of milling and concentrate production, and therefore differ from the production costs for the three months ended December 31, 2021. See Reconciliation to IFRS in the Company’s Management Discussion and Analysis.
  3. AlSC per oz include mining, processing, direct overhead, corporate general and administration expenses, on-site exploration, reclamation and sustaining capital. The production costs for the year ended December 31, 2021 include mining costs from July to September 2021, prior to the commencement of milling and concentrate production, and therefore differ from the production costs for the three months ended December 31, 2021. See Reconciliation to IFRS in the Company’s Management Discussion and Analysis
  4. Production costs include mining, milling and direct overhead at the operation sites. See Reconciliation to IFRS in the Company’s Management Discussion and Analysis.
  5. Based on provisional sales before final price adjustments, before payable metal deductions, treatment, and refining charges.

 

Posted April 26, 2022

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