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Santacruz Silver Produces 977,679 Silver Equivalent Ounces in the Third Quarter

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Santacruz Silver Produces 977,679 Silver Equivalent Ounces in the Third Quarter

 

 

 

 

 

Santacruz Silver Mining Ltd. (TSX-V: SCZ) is pleased to announce that total production in the third quarter of 2020 reached 977,679 silver equivalent ounces, representing a 38% increase from Q2 2020 as operations returned to normal. During Q2 2020, Mexico’s Ministry of Health issued a federal decree requiring all non-essential businesses, including mining, to temporarily suspend activities for 42 days in response to the global pandemic.

 

Highlights:

 

  • Zimapan Mine AgEq production increased by 44% compared to Q2 2020 and 52% compared to Q3 2019.
  • Rosario AgEq production decreased by 20% compared to Q2 2020 and 57% to Q3 2019.
  • Consolidated AgEq production continues to improve quarter over quarter despite lower production at Rosario:
    • Production was 38% higher compared to Q2 2020 due to the resumption of normal throughput, and 3% higher compared to Q3 2019.
    • Q3 2019 results included only 50% of Zimapan and 100% of Veta Grande production, whereas Q3 2020 results reflect 100% of Zimapan and the discontinuance of operations at Veta Grande (Q3 2019 production of 214,284 AgEq oz),

 

Mr. Carlos Silva, CEO, stated; “During Q2 2020 when operations were suspended due to the Mexican Ministry of Health’s federal decree, we took the opportunity to make certain structural and management adjustments. As demonstrated by our third quarter results, these adjustments positioned us for improved performance. With the closing of our recent private placement (see news release dated October 16, 2020), we added seven new scooptrams (5 at Zimapan Mine and 2 at Rosario Mine), which will allow us to further increase production at the Zimapan Mine and move the Rosario Mine towards budgeted production. After taking these matters into account together with continued strong precious metals prices and a stronger balance sheet, management believes Q4 2020 will be a turning point in the success of Santacruz as we continue the trend of quarter over quarter improvements. We are very excited about the future of the Company as we continue to execute our production plans aiming for solid production results for Q4, and a strong start to 2021.”

 

2020 Third Quarter Consolidated Production Results

 

 

Summary of Production Results 2020 Q3 2020 Q2 2019 Q3
Material Processed (tonnes milled) 176,640 116,799 148,288
Silver eqv. ounce production(1) (2) 977,679 709,765 952,835
Silver production (ounces) (2) 304,123 216,034 256,878
Gold production (ounces) (2) 59 57 273
Lead production (tonnes) (2) 1,080 761 916
Zinc production (tonnes) (2) 3,041 2,199 2,393
Copper production (tonnes) (2) 395 308 316
Average Head Grade (g/t Ag Eqv.)(1) 231 248 278
Development (metres) 2,103 1,094 2,588

 

 

2020 Third Quarter Zimapan Mine Production Results

 

 

Summary of Production Results 2020 Q3 2020 Q2 2019 Q3
Material Processed (tonnes milled)(2) 164,846 106,725 82,242
Silver eqv. ounce production(1) (2) 920,985 639,021 606,589
Silver production (ounces)(2) 282,760 181,836 151,464
Silver head grade (g/t) 73 75 75
Gold head grade (g/t)
Lead head grade (%/t) 0.72 0.72 0.59
Zinc head grade (%/t) 2.40 2.55 2.28
Copper head grade (%/t) 0.33 0.42 0.48
Silver recovery (%) 72.3 70.4 76.6
Lead production (tonnes)(2) 1,048 692 463
Zinc production (tonnes)(2) 2,841 2,021 1,492
Copper production (tonnes)(2) 395 308 316
Average Head Grade (g/t Ag Eqv.)(1) 234 249 286
Development (metres) 1,701 659 745

 

 

2020 Third Quarter Rosario Project Production Results

 

 

Summary of Production Results 2020 Q3 2020 Q2 2019 Q3
Material Processed (tonnes milled) 11,794 10,074 22,048
Silver eqv. ounce production(1) 56,693 70,744 131,962
Silver production (ounces) 21,363 34,198 43,020
Silver head grade (g/t) 66 113 65
Gold head grade (g/t) 0.24 0.25 0.25
Lead head grade (%/t) 0.31 0.77 0.40
Zinc head grade (%/t) 2.06 2.04 2.04
Silver recovery (%)(2) 85.9 93.2 93.2
Gold production (ounces) 59 57 134
Lead production (tonnes) 32 70 83
Zinc production (tonnes) 200 178 383
Average Head Grade (g/t Ag Eqv.)(1) 183 247 213
Development (metres) 402 435 975

 

 

2020 Third Quarter Vetagrande Project Production Results

 

 

Summary of Production Results 2020 Q3 2020 Q2 2019 Q3
Material Processed (tonnes milled) 43,999
Silver eqv. ounce production(1) 214,284
Silver production (ounces) 62,394
Silver head grade (g/t) 99
Gold head grade (g/t) 0.24
Lead head grade (%/t) 1.45
Zinc head grade (%/t) 2.11
Silver recovery (%) 44.6
Gold production (ounces) 139
Lead production (tonnes) 370
Zinc production (tonnes) 519
Average Head Grade (g/t Ag Eqv.)(1) 294
Development (metres) 869

 

(1) AgEqvOz = (Au*Pau)+(Ag*Pag)+(Pb*Ppb*2205)+(Zn*Pzn*2205)+(Cu*Pcu*2205)
                                                                            (Pag)

 

Metal Prices 2020: Ag $17.85, Au $1,480, Pb $0.92, Zn $1.09, Cu $2.80
Metal Prices 2019: Ag $15.25, Au $1,281, Pb $0.94, Zn $1.20, Cu $2.92

 

(2) Q3 2019 production results at the Zimapan Mine reflect 50% of total production whereas the Q2 and Q3 2020 results reflect 100%.

 

Investor Relations Engagement

 

Santacruz Silver wishes to announce that it has retained the services of Vancouver-based Mars Investor Relations Corp. a full-service investor relations and consulting services company focused on the junior mining sector. Under the terms of the engagement agreement, the Company will compensate Mars $144,000 for the 12-month initial term of the Agreement and has granted Mars stock options exercisable to acquire an aggregate of 300,000 common shares at a price of C$0.30 per share for 60 months. The Options shall vest quarterly over a period of 12 months, with 25% vesting each quarter. The Options and any shares issuable upon exercise thereof are subject to a hold period of four months and one day. In addition, Mars and or its affiliates currently hold 4,313,700 shares, however Mars may from time to time acquire or dispose of securities of the Company through the market, privately or otherwise, as circumstances or market conditions warrant. Mars is at arm’s length to Santacruz Silver and has no other relationship with the Company, except pursuant to the Agreement.

 

About Santacruz Silver Mining Ltd.

 

Santacruz is a Mexican focused silver company that currently owns and operates the Rosario Project. The Company also owns 100% of Carrizal Mining S.A. de C.V. Carrizal Mining holds a 20% working interest in the Company’s Veta Grande Project and has the right to operate the Zimapan Mine until December 31, 2020 under a mining lease agreement. On July 28, 2020 the Company announced that it had reached agreement with Minera Cedros, S.A. de C.V. a wholly owned subsidiary of Industrias Peñoles, S.A.B. de C.V., to acquire outright the Zimapan Mine for US$20.0 million (plus applicable IVA of US$3.2 million), subject to a number of conditions, including receipt of all necessary regulatory approvals including approval of the TSX Venture Exchange to the transaction which will constitute a “Fundamental Acquisition” pursuant to TSXV Policy 5.3.

 

The Company is managed by a technical team of professionals with proven track records in developing, operating and discovering silver mines in Mexico. Our corporate objective is to become a mid-tier silver producer.

 

Rosario Project

 

The decisions to commence production at the Rosario Mine, Cinco Estrellas Property and Membrillo Prospect were not based on a feasibility study of mineral reserves demonstrating economic and technical viability, but rather on a more preliminary estimate of inferred mineral resources. Accordingly, there is increased uncertainty and economic and technical risks of failure associated with this production decision. Production and economic variables may vary considerably, due to the absence of a complete and detailed site analysis according to and in accordance with NI 43-101.

 

Veta Grande Project

 

The decision to commence production at the Veta Grande Project was not based on a feasibility study on mineral reserves demonstrating economic and technical viability. Accordingly, there is increased uncertainty and economic and technical risks of failure associated with this production decision. Production and economic variables may vary considerably due to the absence of a complete and detailed site analysis according to and in accordance with NI 43-101.

 

Zimapan Mine

 

Production at the Zimapan Mine is not supported by a feasibility study on mineral reserves demonstrating economic and technical viability or any other independent economic study under NI 43-101. Accordingly, there is increased uncertainty and economic and technical risks of failure associated with production operations at the Zimapan Mine. Production and economic variables may vary considerably due to the absence of a complete and detailed site analysis according to and in accordance with NI 43-101. There is no assurance that the Company will be successful in negotiating and completing any acquisition of the Zimapan Mine. Any transaction to acquire the Zimapan Mine will be subject to receipt of all necessary regulatory approvals, including Santacruz obtaining the approval of the TSX Venture Exchange.

 

Posted October 26, 2020

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