TSX: SIL | NYSE American: SILV
VANCOUVER, BC, March 29, 2021 /PRNewswire/ - SilverCrest Metals
Inc. ("SilverCrest" or the "Company") is pleased to report the
Company's audited financial results for the year ended December 31, 2020, and an update on construction
and exploration activities. The audited consolidated financial
statements and management's discussion and analysis for the year
ended December 31, 2020 are available
under the Company's SEDAR profile on www.sedar.com or on
SilverCrest's website www.silvercrestmetals.com. All amounts
herein are presented in United
States Dollars unless otherwise stated.
Highlights – 2020 and Subsequent Events
- At the Company's Las Chispas Project ("Las Chispas") located in
Sonora, Mexico, approximately
173,000 metres of in-fill and expansion drilling and 6.1 kilometres
of underground decline development and in-vein drifting were
completed in 2020. The Company also stockpiled an additional
estimated 26,600 tonnes of mineralized material. The total
high-grade stockpile at year end (excluding historic stockpiles) is
estimated to be 52,400 tonnes at a diluted grade of 7.0 grams per
tonne ("gpt") gold ("Au") and 587 gpt silver ("Ag") or 1,192 gpt
silver equivalent ("AgEq", 86.9:1, Ag:Au). Other Las Chispas site
activities, during 2020, included earthworks, the building of the
administration and warehouse facilities, communication system,
water pumping station, and initial construction of a temporary
quarantined COVID-19 camp.
- On January 10, 2020, the Company
completed a private placement with SSR Mining Inc. ("SSR Mining")
of 1,819,074 common shares at a price of C$7.28 per common share for gross proceeds of
C$13.2 million.
- On April 17, 2020, the Company
completed a non-brokered private placement of 13,465,001 common
shares at a price of C$7.50 per
common share for gross proceeds for C$101.0
million.
- On April 24, 2020, the Company
completed a private placement with SSR Mining of 3,597,291 common
shares at a price of C$7.50 per
common share for gross proceeds of C$27.0
million.
- On June 9, 2020, the Company
filed a final short form base shelf prospectus to offer common
shares, warrants, subscription receipts, debt and convertible debt
securities or units of up to an aggregate initial offering price of
C$200 million (refer to subsequent
financing completed on February 22,
2021 below).
- On December 31, 2020, the
Company's subsidiary entered into an engineering, procurement and
construction ("EPC") contract with Ausenco Engineering Canada Inc.
and its affiliate (together as "Ausenco") to construct a 1,250
tonne per day process plant at the Las Chispas Project. The EPC
contract has a fixed price of $76.5
million and at December 31,
2020, the Company had incurred $23.2
million for detailed engineering work, long lead orders and
initial mobilization payment. As such, at December 31, 2020, the Company's remaining
commitment to Ausenco on the EPC contract was $53.3 million. As at February 28, 2021, the Company incurred an
additional $16.0 million towards the
EPC contract for meeting additional milestones.
- On December 31, 2020, the
Company's subsidiary entered into a $120.0
million project financing facility (the "Credit Facility")
with a four-year term and immediately drew down $30.0 million. Subsequent drawdowns under the
Credit Facility are available upon satisfaction of certain
customary conditions precedent, but are not tied to any
construction milestones. There are no hedges, offtake agreements or
warrants required as part of this Credit Facility. The Company may
voluntarily prepay amounts owing under the Credit Facility at any
time, subject to a prepayment fee. The Credit Facility has an
availability period of up to 20 months. Interest under the Credit
Facility is payable at a rate of 6.95% plus the greater of: (i)
3-month LIBOR (or agreed upon equivalent) and (ii) 1.5%, and is
payable quarterly, with a Company option to accrue during the
availability period.
- On February 2, 2021, the Company
announced positive results from a feasibility study (the
"Feasibility Study") for the Las Chispas Project. Details of the
Feasibility Study, including an updated Mineral Resource Estimate
and an initial Mineral Reserve Estimate, are provided in a
technical report filed under the Company's SEDAR profile entitled,
"NI 43-101 Technical Report & Feasibility Study on the Las
Chispas Project" with an effective date of January 4, 2021 (the "Technical Report"). The
Technical Report was prepared by Ausenco with the assistance of
several other independent engineering companies and
consultants.
- With completion of the Feasibility Study and release of the
Technical Report on February 2, 2021,
the Board formally approved construction of the Las Chispas
Project. The Company estimates that the initial capital cost
requirement for the Las Chispas Project during construction (from
January 1, 2021 to end of
construction in H1, 2022), will be comparable to the initial
capital costs estimated in the Feasibility Study at $137.7 million.
- On February 22, 2021, the
Company, using its base shelf prospectus previously filed on
June 9, 2020, completed a bought deal
prospectus offering of a total of 15,007,500 common shares at a
price of $9.20 per common share for
gross proceeds of $138.1
million.
- As at February 28, 2021,
SilverCrest is well funded with cash and cash equivalents of
$245.4 million and $90.0 million available under the Credit
Facility.
COVID-19 Update
The Company continues to adjust to the unprecedented COVID-19
conditions. In May 2020, the Company
installed a fully confined temporary camp with a capacity for 160
essential persons to continue its exploration, underground
development, and construction of early works with the objective of
limiting potential exposure of personnel and nearby communities to
the virus. Before entering the confined camp, all persons are
tested for COVID-19 (rRT-PCR test) and, following receipt of
negative tests, are transported to site using strict health and
safety protocols. Once on site, all appropriate COVID-19 related
protocols are enforced. As of December 31,
2020, the Company incurred approximately $3.7 million of expenditures related to COVID-19,
the majority of which were for the construction and operation of
the fully confined camp at Las Chispas and for providing assistance
with medical needs in the local communities. As of February 28, 2021, the Company completed Phase 1
construction (320 rooms) of a planned 520 single occupancy room
camp. The construction camp is expected to be at full capacity in
Q2, 2021.
Exploration Projects to Date
During the year ended December 31,
2020, the Company had completed 173,000 metres of drilling.
As of December 31, 2020, the Company
had drilled an estimated cumulative 477,000 metres (1,763 drill
holes) since inception of the Las Chispas Project. Results since
February 2019 (drilling cut-off date
for the Preliminary Economic Assessment filed on SEDAR July 5, 2019) to October
16, 2020 (drilling cut-off date for the Technical Report)
were presented in the Mineral Resources Estimate section of the
Technical Report.
From January 1, 2020, the Company
announced further exploration and drill results, which
included:
- Expansion of the Babi Sur Vein (news release dated January 20, 2020);
- Discovery of Area 200 zone and additional drill results from
the Babicanora Norte Vein (news release dated February 18, 2020);
- Expansion of the Babi Vista Vein (news releases dated
March 9, 2020, May 12, 2020 and August
13, 2020);
- Discovery of the El Muerto zone (news release dated
November 5, 2020);
- Discovery of the Babi Vista Splay Vein (news release dated
November 16, 2020); and
- In-fill drill results for Babicanora, the Babicanora Footwall,
the Babicanora Hangingwall and Babicanora Sur veins (news release
dated January 24, 2021).
In July 2020, the Company acquired
the Picacho property ("Picacho") by paying $2.4 million, including government back taxes,
for 100% ownership in 11 mining concessions located approximately
40 kilometres northeast of Las Chispas in Sonora, Mexico. During Q4, 2020, the Company
received all access rights and necessary drill permits (5-year
license) for Picacho and as a result drilled 5,800 metres and
incurred $607,769 in total
exploration expenditure in 2020.
For 2021, the Company has budgeted $42.0
million for its company-wide exploration programs, which
include core drilling an estimated 356,000 metres, mostly at Las
Chispas. The Company currently has six core drill rigs at Las
Chispas and three core drill rigs active at Picacho. In the first
two months of 2021, the Company has drilled 22,000 metres at Las
Chispas and 10,000 metres at Picacho.
Operations Project to Date
During 2020, the Company completed approximately 6.1 kilometres
of underground decline and lateral drifting, including 715 metres
of in-vein drifting, and stockpiled an additional estimated 26,600
tonnes of mineralized material. By the end of February 2021, cumulatively, the Company had
completed approximately 10.1 kilometres of underground workings,
including 1.8 kilometres of in-vein drifting. The total high-grade
stockpile at February 28, 2021 is
estimated to be 64,300 tonnes at a diluted grade of 6.5 gpt Au and
588 gpt Ag, or 1,152 gpt AgEq (86.9:1, Ag:Au). This total excludes
historic stockpiles (Proven Reserves) of 162,600 tonnes grading
1.23 gpt Au and 108 gpt Ag, or 215 gpt AgEq (86.9:1, Ag:Au).
As of February 28, 2021,
construction of the Las Chispas processing plant has commenced with
the Ausenco team on site, concrete being poured for foundations,
and most of major long lead equipment items on order. Start up for
production is anticipated by mid-2022.
For 2021, the Company has budgeted to incur approximately
$113.7 million of the estimated
initial capital costs of $137.7
million (see Technical Report). The Company's 2021 planned
construction and development activities include:
- Completion of detailed engineering;
- Advancing process plant construction;
- Start of construction of electrical grid powerline;
- Upgrade of main access road and bridge construction;
- An additional 6,800 metres of underground development;
- Underground infrastructure work and stockpile growth; and
- Commencement of tailings facility construction.
Las Chispas Expenditures
During 2020, the Company recorded $47.5
million under exploration and evaluation expenditures for
the Las Chispas Project, which primarily consisted of:
- drilling expenses of $16.4
million;
- decline construction and underground working of $15.3 million;
- technical consulting services and studies of $3.8 million;
- salaries and remuneration of $5.0
million; and
- field and administrative costs of $4.2
million.
In addition, as at December 31,
2020, the Company recorded $28.8
million under construction in progress related to the Las
Chispas Project.
Financial Results
At December 31, 2020, the Company
held $135.1 million (2019 –
$85.0 million) as cash and cash
equivalents. The primary factors that contributed to the increase
in cash and cash equivalents from 2019 to 2020 include $136.0 million generated by financing activities
net of associated costs, including the completion of a private
placement on April 17, 2020, for
$75.3 million, the completion of two
private placements with SSR Mining on January 10, 2020, for $9.8
million and on April 24, 2020,
for $20.1 million, draw down of the
Credit Facility of $30.0 million and
the exercise of options and warrants for $3.7 million. These cash inflows were offset by
$66.7 million paid on the Company's
operating activities, which was primarily made up of $47.5 million incurred on the exploration program
at Las Chispas, $7.2 million of
foreign exchange losses, and $4.4
million incurred on corporate expenditures, $6.2 million paid on net value-added taxes and
$3.9 million paid on prepaids and
deposits. Furthermore, the cash inflows were also offset
primarily by $22.9 million paid
towards mineral property, plant, and equipment.
During the year ended December 31,
2020, comprehensive loss was $59.9
million (2019 – $44.7
million).
The Qualified Person under National Instrument 43-101 Standards
of Disclosure for Mineral Projects for this news release is N.
Eric Fier, CPG, P.Eng, and CEO for
SilverCrest, who has reviewed and approved its contents.
ABOUT SILVERCREST METALS INC.
SilverCrest is a
Canadian precious metals exploration and development company
headquartered in Vancouver, BC,
that is focused on new discoveries, value-added acquisitions and
targeting production in Mexico's
historic precious metal districts. The Company's top priority is on
the high-grade, historic Las Chispas mining district in
Sonora, Mexico, where it has
completed a feasibility study on the Las Chispas Project and is
proceeding with mine construction. Startup of production at the Las
Chispas Mine is targeted for mid-2022. SilverCrest is the first
company to successfully drill-test the historic Las Chispas
Property resulting in numerous high-grade precious metal
discoveries. The Company is led by a proven management team in all
aspects of the precious metal mining sector, including taking
projects through discovery, finance, on time and on budget
construction, and production.
FORWARD-LOOKING STATEMENTS
This news
release contains "forward-looking statements" and "forward-looking
information" (collectively "forward-looking statements") within the
meaning of applicable Canadian and United
States securities legislation. These include, without
limitation, statements with respect to: the strategic plans, timing
and expectations for the Company's exploration programs at the Las
Chispas Project and the Picacho Property and the start up of
production at the Las Chispas Mine by mid-2022. Such forward
looking statements or information are based on a number of
assumptions, which may prove to be incorrect. Assumptions have been
made regarding, among other things: impact of the COVID-19
pandemic; the reliability of mineralization estimates, the
conditions in general economic and financial markets; availability
of skilled labour; timing and amount of expenditures related to
rehabilitation and drilling programs; and effects of regulation by
governmental agencies. The actual results could differ materially
from those anticipated in these forward-looking statements as a
result of risk factors including: uncertainty as to the impact and
duration of the COVID-19 pandemic; the timing and content of work
programs; results of exploration activities; the interpretation of
drilling results and other geological data; receipt, maintenance
and security of permits and mineral property titles; environmental
and other regulatory risks; project cost overruns or unanticipated
costs and expenses; and general market and industry conditions.
Forward-looking statements are based on the expectations and
opinions of the Company's management on the date the statements are
made. The assumptions used in the preparation of such statements,
although considered reasonable at the time of preparation, may
prove to be imprecise and, as such, readers are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date the statements were made. The Company
undertakes no obligation to update or revise any forward-looking
statements included in this news release if these beliefs,
estimates and opinions or other circumstances should change, except
as otherwise required by applicable law.
N. Eric Fier, CPG, P.Eng
Chief Executive Officer
SilverCrest Metals Inc.
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SOURCE SilverCrest Metals Inc.