SilverCrest Mines Inc. (TSX-V: SVL; NYSE MKT: SVLC) is pleased to announce its financial results for the first quarter ended March 31, 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 months ended March 31, 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.
J. Scott Drever, President stated; “We are pleased with the steady start to 2013, for which operating costs and production were consistent with budget and mine plan, however, our financial performance in comparison to the extraordinary stellar first quarter of 2012, was impacted by lower metal prices and our decision to accelerate waste removal resulting in less ore processed and ultimately fewer ounces of gold sold compared to the first quarter 2012. Our operating team continues to tightly control operating costs, which resulted in the average cash operating cost of ($7.69) per ounce during the first quarter which was less than the corporate guidance of $8.50 per silver equivalent ounce. We are comfortable that, as the strip ratio declines during the second half of 2013 and the ore grades in the pit continue to increase, we will meet our corporate market guidance of 625,000 ounces of silver and 33,000 ounces of gold for 2013.”
FINANCIAL HIGHLIGHTS OF Q1, 2013, Compared to Q1, 2012:
Comparison of the three months ended March 31, 2013 to March 31, 2012
Net earnings were $6,002,276 ($0.06 per share basic) for the first quarter, consistent with $6,070,520 ($0.07 per share basic) in the first quarter of 2012.
Silver and gold revenues totalled $15,329,642 (2012 – $19,599,570) in the first quarter. Silver and gold revenues on a cash basis decreased by 17% to $14,776,451 (2012 – $17,776,691), primarily from a reduction in the number of gold ounces sold and lower realized spot prices.
Silver sales for the quarter were 157,088 ounces (2012 – 139,771), or 12% higher than the same period in 2012, but the average realized price was 12% lower at $30 (2012 – $34) per ounce. Total gold sales were 7,370 ounces (2012 – 9,788) or 25% below 2012. The Company sold 5,896 spot gold ounces (2012 – 6,471) at lower market spot realized prices of $1,626 (2012 – $1,720) per ounce. The Company delivered 1,474 gold ounces (2012 – 1,958) to Sandstorm at $350 per ounce.
Cost of sales amounted to $4,368,519 (2012 – $4,491,131). The cash cost per silver equivalent ounce sold amounted to $7.69, Au:Ag 55.8:1 (2012 – $7.00, Au:Ag 51.2:1). Corporate market guidance estimate for 2013 continues at $8.50 per silver equivalent ounce, (Au:Ag 55:1). The increase in cash cost per silver equivalent ounce sold was driven by higher operating costs during the second half of 2012 and lower gold sales, which corresponded to an increase in the average silver equivalent ounce value loaded on the leach pad and recorded in cost of sales. The overall cash cost per silver equivalent ounce increased, despite a decrease of approximately $0.50 per silver equivalent ounce from a lower silver to gold price ratio during the first quarter compared with the same quarter in 2012.
General and administrative expenses increased by 14% to $1,340,926 (2012 – $1,172,197) primarily due to an increase in regulatory expense and remuneration, resulting from the addition of new Corporate personnel and increased compensation for management.
|FINANCIAL AND OPERATING HIGHLIGHTS:||Q1 2013||Q1 2012|
|Cash flow from operations (1)||$ 8,775,212||$ 12,231,163|
|Cash flow from operations (1) per share||$0.08||$0.14|
|Cash operating cost per silver equivalent ounce sold (2)||$7.69||$7.00|
|Silver revenue||$4,672,985||$ 4,699,470|
|Gold revenue – cash basis||$10,103,466||$ 13,077,221|
|Gold revenue – non cash|
|-adjustment to market spot price (4)||$ –||$ 1,088,230|
|-amortization of deferred revenue||$ 553,191||$ 734,649|
|Revenues reported||$ 15,329,642||$ 19,599,570|
|Cost of sales||($4,368,519)||($ 4,491,131)|
|Depletion, depreciation and accretion||($1,439,966)||($ 1,483,841)|
|Mine operating earnings||$ 9,521,157||$ 13,624,598|
|Gain (loss) on derivative instruments||$ –||($ 2,642,756)|
|Other net income (expenses)||($1,526,881)||($1,186,322)|
|Tax recovery (expense)||($1,992,000)||($ 3,725,000)|
|Net earnings||$ 6,002,276||$ 6,070,520|
|Exchange (loss) gain on translation to US Dollars||($ 878,199)||$ 272,821|
|Comprehensive earnings||$ 5,124,077||$ 6,343,341|
|Weighted average number of common shares outstanding||107,170,245||87,861,072|
|Earnings per common share – basic||$0.06||$0.07|
|Earnings per common share – diluted||$0.05||$0.07|
|Silver ounces sold||157,088||139,771|
|Gold ounces sold||7,370||9,788|
|Silver equivalent ounces sold (2)||568,380||641,532|
(1) Cash flow from operations before changes in working capital items. This is a Non-IFRS performance measure.
(2) Silver equivalent 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 (Q1 2013; 55.8:1, Q1 2012; 51.2:1).
(3) IFRS 18 – Revenue should be recorded at its fair value, which for gold and silver is the market spot price on the date revenue is recognized.
(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 operating cost per silver equivalent ounce sold which is a non-IFRS performance measure. The Company presents this measure to provide additional information regarding the Company’s financial results and performance. Please refer to the Company’s MD&A for the three months ended March 31, 2013, for a reconciliation of this measure to reported IFRS results.
OUTLOOK FOR 2013
SilverCrest’s immediate focus is to continue to efficiently operate its flagship Santa Elena low cost open pit silver and gold mine, complete the construction of a new 3,000 tonne-per-day mill facility on schedule and on budget, and complete an update of the Santa Elena Resources, Reserves and Life of Mine Plan (“LOMP”). The Company will also advance the delineation of the large silver, copper, gold deposit at the La Joya Property by completing a PEA and further definition drilling of additional resources at La Joya and other exploration targets in its vicinity.
Santa Elena Open Pit Production Targets
Santa Elena Expansion Targets
La Joya Project Targets
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, and Chief Operating Officer for SilverCrest Mines Inc., who has reviewed and approved its contents.
SilverCrest Mines Inc. 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 gold and silver 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 tonne-per-day facility should recover approximately 625,000 ounces of silver and 33,000 ounces of gold in 2013. An expansion plan is well underway to double metals production at the Santa Elena Mine (open pit, underground and re-processing leach pad). Exploration programs have rapidly advanced the definition of a large polymetallic deposit at the La Joya property in Durango State.
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