TSX.V: SCZ
FSE: 1SZ
VANCOUVER, Nov. 30, 2018 /CNW/ - Santacruz Silver Mining
Ltd. (TSX.V:SCZ) (the "Company" or "Santacruz") reports on the
operating and financial results from the Veta Grande Project in
Zacatecas, Mexico and the Rosario
Project in San Luis Potosi, Mexico
for the third quarter of 2018. The full version of the financial
statements and accompanying management's discussion and analysis
can be viewed on the Company's website at www.santacruzsilver.com
or on SEDAR at www.sedar.com. All amounts are in thousands of
US dollars unless otherwise indicated.
"During the third quarter we saw the beginning of the turnaround
in our mining operations, as our quarter over quarter revenues from
mining operations and improved production costs demonstrate."
stated Arturo Préstamo, Chief Executive Officer of Santacruz.
"Although the positive changes to our production volumes and
operating costs were modest, as a result of our significant mine
development this year and continued focus on such at both
Veta Grande and Rosario, we firmly
believe that we are now positioned to see improved production
volumes and increased grade of mineralized material being milled at
both projects leading to lower unit costs of production."
Selected operating and financial information for the three-month
periods ended September 30, 2018,
June 30, 2018 and June 30, 2017 is presented below:
|
2018
Q3
|
2018
Q2
|
2017
Q3
|
Financial
|
|
|
|
Revenue – Mining
Operations
|
1,657
|
1,466
|
1,798
|
Revenue – Mining
Services
|
569
|
3,569
|
-
|
Gross (Loss) Profit
(4)
|
(2,157)
|
1,287
|
(1,819)
|
Debt
Forgiveness
|
-
|
2,590
|
-
|
Impairment
|
-
|
-
|
(4,350)
|
Net (Loss)
Income
|
(2,888)
|
3,297
|
(5,899)
|
Net Income (Loss) Per
Share – Basic ($/share)
|
(0.02)
|
0.02
|
(0.04)
|
Adjusted EBITDA
(4)
|
(2,739)
|
1,048
|
(1,628)
|
Operating
|
|
|
|
Material Processed
(tonnes milled)
|
57,976
|
52,025
|
46,940
|
Silver Equivalent
Produced (ounces) (1)
|
249,431
|
174,175
|
231,162
|
Silver Equivalent
Sold (payable ounces) (2)
|
137,834
|
116,314
|
166,880
|
Production Cost per
Tonne (3) ($/t)
|
58.32
|
66.12
|
62.91
|
Cash Cost per Silver
Equivalent ($/oz.) (3)
|
27.40
|
32.54
|
23.65
|
All-in Sustaining
Cost per Silver Equivalent ($/oz.) (3)
|
31.07
|
35.48
|
28.14
|
Average Realized
Silver Price per Ounce ($/oz.) (2) (5)
|
14.31
|
16.55
|
16.85
|
(1)
|
Silver equivalent
ounces produced in 2018 have been calculated using prices of
US$17.00/oz., US$1,295/oz., US$1.00/lb. and US$1.35/lb. for silver,
gold, lead and zinc respectively applied to the metal content of
the lead and zinc concentrates produced by the Company. Silver
equivalent ounces produced in 2017 have been calculated using
prices of US$16.00/oz., US$1,150/oz., US$1.00/lb. and US$1.15/lb.
for silver, gold, lead and zinc respectively applied to the metal
content of the lead and zinc concentrates produced by the
Company.
|
(2)
|
Silver equivalent
sold ounces have been calculated using the realized silver prices
stated in the table above, applied to the payable metal content of
the lead and zinc concentrates sold by the Company.
|
(3)
|
The Company reports
non-IFRS measures which include Production Cost per Tonne, Cash
Cost per Silver Equivalent, All-in Sustaining Cost per Silver
Equivalent and Average Realized Silver Price per Ounce. These
measures are widely used in the mining industry as a benchmark for
performance, but do not have a standardized meaning and may differ
from methods used by other companies with similar
descriptions.
|
(4)
|
The Company reports
additional non-IFRS measures which include Gross Profit (Loss) and
Adjusted EBITDA. These additional financial disclosure
measures are intended to provide additional information.
|
(5)
|
Average realized
silver price per ounce is prior to all treatment, smelting and
refining charges.
|
Financial Results
The Company realized an average silver price of $14.31 per ounce during Q3 2018 which represents
an approximate 15% decrease from Q2 and Q1 2018 as well as from Q3
2017.
The Company recorded a net loss of $2,888 in Q3 2018 compared to net income of
$3,297 in Q2 2018 and a net loss of
$5,899 in Q3 2017. The Q2 2018
net income was positively impacted by a one-time adjustment of
$2,590 relating to the forgiveness of
certain trade debt by Carrizal
while mine services revenue decreased in Q3 2018 leading to a gross
margin of $28. Management
expects that mining services revenues will increase in Q4 2018 and
generate a more significant gross margin than in Q3. The net
loss for Q3 2017 was negatively impacted by an impairment charge of
$4,350.
Revenues in Q3 2018 of $2,156
include mining operations of $1,657
(Q3 2017 - $1,798; Q2 2018 -
$1,466) and mining services of
$569 (Q3 2017 - $nil; Q2 2018 -
$3,569). The decreased mining
services revenues recorded in Q3 2018 reflect decreased service
requirements from Carrizal during
the quarter. Management anticipates that increased service
requirements will occur during Q4.
The Company recorded a gross loss of $2,157 during Q3 2018 (Q3 2017 – loss of
$1,819; Q2 2018 – profit of
$1,287). The gross loss
recorded in Q3 2018 and gross profit reported in Q2 2018 reflect
the combined results of the Company's mining operations and mining
services activities. During these periods the mining
operations resulted in gross losses of $2,185 and $2,225
for Q3 2018 and Q2 2018 respectively while mining services resulted
in gross profits of $28 and
$3,452 for the same periods.
Operational Results and Costs
Cash cost per ounce in Q3 2018 was $27.40 per payable ounce of silver sold, an
increase of 16% from $23.65 per ounce
in Q3 2017 and a decrease of 16% from $32.54 per ounce in Q2 2018. Cash cost per ounce
was higher in Q3 2018 as compared to Q3 2017 primarily due to lower
head grades in the quarter arising from management's decision to
focus on mine development at both the Veta Grande and Rosario Projects.
Conversely cash cost per ounce was lower in Q3 2018 as compared to
Q2 2018 due to higher grade mineralized material being mined and
processed in Q3 2018 at the Veta Grande Project.
All-in Sustaining Cost per ounce in Q3 2018 was $31.07 per payable ounce of silver sold, an
increase of 14% from $27.14 per ounce
in Q3 2017 and a decrease of 12% from $35.48 per ounce per ounce in Q2 2018. The
changes occurred for the same reasons as those relating to the cash
cost per ounce changes referenced above.
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company with two producing
silver projects (Veta Grande Project and Rosario Project) and two
exploration properties (Minillas Property and Zacatecas
Properties). 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.
'signed'
Arturo Préstamo Elizondo,
President and CEO
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward looking information
Certain statements contained in this news release constitute
"forward-looking information" as such term is used in applicable
Canadian securities laws. Forward-looking information is based on
plans, expectations and estimates of management at the date the
information is provided and is subject to certain factors and
assumptions. In making the forward-looking statements
included in this news release, the Company has applied several
material assumptions, that the Company's financial condition and
development plans do not change as a result of unforeseen events,
that third party mineralized material to be milled by the Company
will have properties consistent with management's expectations,
that the Company will receive all required regulatory approvals,
and that future metal prices and the demand and market outlook for
metals will remain stable or improve. Forward-looking
information is subject to a variety of risks and uncertainties and
other factors that could cause plans, estimates and actual results
to vary materially from those projected in such forward-looking
information. Factors that could cause the forward-looking
information in this news release to change or to be inaccurate
include, but are not limited to, the risk that any of the
assumptions referred to prove not to be valid or reliable, which
could result in lower revenue, higher cost, or lower production
levels; delays and/or cessation in planned work; changes in the
Company's financial condition and development plans; delays in
regulatory approval; risks associated with the interpretation of
data (including in respect of the third party mineralized material)
regarding the geology, grade and continuity of mineral deposits;
the possibility that results will not be consistent with the
Company's expectations, as well as the other risks and
uncertainties applicable to mineral exploration and development
activities and to the Company as set forth in the Company's
continuous disclosure filings filed under the Company's profile
at www.sedar.com. There can be no assurance that any
forward-looking information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader should not
place any undue reliance on forward-looking information or
statements. The Company undertakes no obligation to update
forward-looking information or statements, other than as required
by applicable law.
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 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.
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SOURCE Santacruz Silver Mining Ltd.