
HIGHLIGHTS OF Q3, 2012 (Compared to Q3, 2011):
-- Cash flow from operations (1) increased 103% to $10.2 million. -- Cash operating cost per silver equivalent ounce sold (2) increased 5% to $7.60. -- Revenues reported per IFRS (3) rose 11% to $16.7 million on sales of 152,088 silver ounces (up 57%) and 7,923 gold ounces (up 4%). -- Comprehensive earnings amounted to $2.2 million ($0.03 per share), compared to $0.01 million ($0.00 per share). -- Working capital increased 22% from $21.4 million to $26.1 million. -- Cash and cash equivalents were $37.9 million (at September 30, 2012).
J. Scott Drever, President stated; “We had another strong quarter with 558,185 silver equivalent ounces sold (2), for reported revenues of $16.7 million. The average cash operating cost was $7.60 per silver equivalent ounce, which is below our budget of $8.20. Our Santa Elena low cost, open pit heap leach mine operations continue to perform well, and generated cash flows of $10.2 million which will contribute to the financing of the Santa Elena Expansion plan and the development of our major polymetallic La Joya Project. Record silver production in the third quarter has enabled us to increase annual silver production guidance from 435,000 ounces to 535,000 ounces. We are on track to meet our annual production guidance of 33,500 gold ounces.”
---------------------------------------------------------------------------- Financial and Operating Highlights: Q3 2012 Q3 2011 ---------------------------------------------------------------------------- Cash flow from operations (1) $ 10,224,354 $ 5,034,988 Cash flow from operations (1) per share $ 0.11 $ 0.06 Cash operating cost per silver equivalent ounce sold (2) $ 7.60 $ 7.27 Revenues (3) Silver revenue $ 4,811,342 $ 3,618,235 Gold revenue - cash basis $ 10,658,039 $ 6,183,505 ---------------------------------------------------------------------------- $ 15,469,381 $ 9,801,740 Gold revenue - non cash - adjustment to market spot price $ 630,666 $ 4,681,312 - amortization of deferred revenue $ 594,705 $ 572,462 ---------------------------------------------------------------------------- Revenues reported $ 16,694,752 $ 15,055,514 Cost of sales $ (4,239,773) $ (3,652,887) Depletion, depreciation and accretion $ (1,466,356) $ (1,116,431) ---------------------------------------------------------------------------- Mine operating earnings $ 10,988,623 $ 10,286,196 Loss on derivative instruments $ (5,126,321) $ (6,501,599) Other net expenses $ (1,436,986) $ (1,564,073) Tax expense $ (3,162,000) - Exchange gain (loss) on translation to US Dollars $ 949,838 $ (2,138,668) ---------------------------------------------------------------------------- Comprehensive earnings $ 2,213,154 $ 81,856 Weighted average number of common shares outstanding 89,737,466 85,931,326 Comprehensive earnings per share - basic $ 0.03 $ 0.00 ---------------------------------------------------------------------------- Silver ounces sold 152,088 96,631 Gold ounces sold 7,923 7,627 Silver equivalent ounces sold (2) 558,185 502,402 Ag : Au Ratio (2) 51.2:1 53.2:1 ---------------------------------------------------------------------------- (1) Cash flow from operations before changes in working capital items and income taxes. (2) This is a Non-IFRS performance measure. Silver equivalent ounces consist of the number of ounces of silver production plus the number of ounces of gold production multiplied by the ratio of the spot gold price to the spot silver price at the quarter end dates. (3) Per "IFRS 18 - Revenue", revenue should be recorded at its fair value, which for gold and silver is the market spot price on the date revenue is recognized.
Under IFRS the Company’s derivative instruments are fair valued at the financial position date, with the resulting gain or losses included in the operating results for the period. The derivative gain (loss) relates to the incremental fair value of the MBL Hedging Facility, which represents the difference between the market spot price of gold at the quarter end and strike price of $926.50 per ounce. Loss on derivative instruments during the period amounted to $5,126,321 (2011 – $6,501,599) resulting from an 11% increase in the gold forward price at September 30, 2012, to $1,783 (2011 – $1,631) from $1,606 (2011 – $1,518) at June 30, 2012.
Exchange gain (loss) on translation to US Dollars amounted to $949,838 (2011 – ($2,138,668)) due to a significant strengthening of the Canadian dollar against the US dollar since June 30, 2012. The Company’s Canadian assets were translated at US$1.00 = CAD$1.0191 at June 30, 2012 and US$1.00 = CAD$0.9837 at September 30, 2012
Comparison of Q3, 2012, to Q2, 2012
Operating cash flows (1) were up 42% to $10.2 million ($0.11 per share), from $7.2 million ($0.08 per share) primarily due to better realized silver and gold prices and more gold ounces sold at market prices rather than delivering into the Hedging Facility. SilverCrest chose to deliver 916 ounces into the Hedging Facility during Q3 compared with 4,209 ounces in the previous quarter. The realized prices of silver and gold spot sales were up 10% and 4%, respectively.
The financial 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, 2012 and associated MD&A which are available on the Company’s website at www.silvercrestmines.com and under the Company’s profile on SEDAR at www.sedar.com.
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 uses 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 and nine months ended September 30, 2012, for a reconciliation of this measure to reported IFRS results.
SilverCrest Mines Inc. (TSX VENTURE:SVL)(NYSE MKT:SVLC)(NYSE Amex:SVLC) 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, Mexico. 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 tonnes per day facility should recover approximately 4,805,000 ounces of silver and 179,000 ounces of gold over the 6.5 year life of the open pit phase of the Santa Elena Mine. A three year expansion plan is underway to double metals production at the Santa Elena Mine and exploration programs are rapidly advancing the definition of a large polymetallic deposit at the La Joya property in Durango State.
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. These statements relate to analyses and other information that are based on expectations of future performance, including silver and gold production and planned work programs. Statements concerning reserves and mineral resource estimates may also constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the property is developed and, in the case of mineral reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited.
The information provided in this news release is not intended to be a comprehensive review of all matters and developments concerning the Company. It should be read in conjunction with all other disclosure documents of the Company. The information contained herein is not a substitute for detailed investigation or analysis. No securities commission or regulatory authority has reviewed the accuracy or adequacy of the information presented.
J. Scott Drever, President
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