TSX: SIL | NYSE American: SILV
VANCOUVER, BC, Jan. 31,
2023 /CNW/ - SilverCrest Metals Inc.
("SilverCrest" or the "Company") is pleased to provide fourth
quarter operational results (Q4, 2022) and an update on activities
at the Company's Las Chispas Mine ("Las Chispas" or the "Mine")
located in Sonora, Mexico. All
currency amounts herein are presented in United States Dollars, unless otherwise
Q4, 2022 Highlights
- Commercial production declared on November 1, 2022, marking Q4, 2022 a ramp-up
- In the quarter, recovered metal, including inventory, was
11,940 ounces ("oz") of gold ("Au") and 1.20 million oz of silver
("Ag"), or 2.23 million oz of silver equivalent ("AgEq**"). Metal
poured totaled 10,896 oz Au and 1.06 million oz Ag, or 2.01 million
- Powerline was fully completed in November 2022 and the Mine is now energized by
national grid power with improved stability.
- Underground mining averaged 700 tonnes per day ("tpd") below
the 2021 Feasibility Study forecast of 750 tpd, but in line with
the revised forecast of 600 to 700 tpd (see news release dated
September 14, 2022).
- Processing plant operating metrics exceeded the 2021
Feasibility Study* for tonnage milled, plant availability and
metallurgical recoveries with December
2022 average throughput of 1,318 tpd at 95.5% availability
(in line with design of 1,250 tpd at 91.3% availability).
- At the end of 2022, the ore stockpiles were estimated at
261,600 tonnes below the 2021 Feasibility Study estimate of 311,200
tonnes due to a combination of higher processing rates and offset
by lower mining rates than planned.
- An updated technical report ("Updated Technical Report")
remains on schedule for Q2, 2023 and will form the basis for
updated cost and production guidance. The 2021 Feasibility Study
was based on Q3, 2020 costs which have been impacted by inflation
and may also be impacted by changes to the mine plan.
- Exploration at Las Chispas focused on assisting operations with
database management, grade control, drilling on new vein targets,
and delineation drilling of planned mining stopes.
- Notable improvement in our 2022 Lost Time Injury Frequency Rate
("LTIFR")*** to 0.42 from 0.63 in 2021.
- Local community-based multi-year projects have advanced with a
focus on water and sewage infrastructure.
- Released Task Force on Climate-Related Financial Disclosure
("TCFD") and Water Stewardship Reports, inaugural ESG report to
follow in 2023.
- Financial position remains strong with debt refinancing
completed at a lower rate and a reduction of debt outstanding by
$40.0 million. Exited 2022 with
$50.8 million in cash and
$50.0 million in debt.
* NI 43-101
Technical Report & Feasibility Study on The Las Chispas
Project dated January 4, 2021 (the "2021 Feasibility
** AgEq is based on the
2021 Feasibility Study Mineral Resource and Reserve gold to silver
ratio of 86.9:1 calculated using US$1,410/oz Au and US$16.60/oz
***based on 200,000
Pierre Beaudoin, COO, remarked,
"2022 was a pivotal year for SilverCrest with construction
completed slightly ahead of schedule and under budget which is a
rare achievement in this industry. This milestone set the positive
tone for the ramp-up and declaration of commercial production in
Q4, 2022. We are currently working on optimization of Las Chispas
operations, and we expect to complete its Updated Technical Report
in Q2, 2023 to provide the foundation for production and cost
guidance going forward."
N. Eric Fier, CPG, P.Eng, and
CEO, stated, "We are very pleased with our progress at Las Chispas.
Within five months of our first metal pour we declared commercial
production, refinanced our previous project financing facility,
which we did not fully draw, and reduced our total debt outstanding
from $90 million to $50 million. As we begin 2023, our focus is on
generating revenue and using established cost controls to maximize
free cash flow and pursue growth opportunities."
Table 1: Operational Statistics
Metal Recovered and Produced
The combination of better-than-expected throughput and
processing recoveries led to greater recovered and produced metal
(poured metal) than planned. The variance between metal
recovered and produced relates to metal inventory both in the plant
and plant refinery and is largely a function of the plant ramp-up
and is expected to become negligible as we stabilize the
Figure 1 outlines the monthly metal recovered and processed
grades since starting the processing plant in late May 2022. Since that time, recovered metal has
totaled 17,768 oz Au and 1.74 million oz Ag, or 3.29 million oz
AgEq which compared to the 2021 Feasibility Study of 12,249 oz Au
and 1.18 million oz Ag, or 2.25 million oz AgEq. A total of 15,041
oz Au and 1.44 million oz Ag, or 2.75 million oz AgEq have been
produced in 2022, which compares to the 2021 Feasibility Study plan
of 10,449 oz Au and 1.00 million oz Ag, or 1.91 million oz
2022 processed grades averaged 3.05 gpt Au and 312 gpt Ag, or
577 gpt AgEq as compared to the 2021 Feasibility Study plan of 2.53
gpt Au and 254 gpt Ag, or 474 gpt AgEq. The 2021 Feasibility Study
plan for the use of lower grade stockpile material during the
ramp-up was amended in Q4, 2022 to include more mined ore as we
benefited from better-than-expected recoveries, thereby allowing
for more information to be gathered on the Mine to Plant grade
Figure 1: Metal Recovered
At the end of November 2022, the
final permanent connection to the 33 kilovolt ("LV") powerline was
completed and stability of the line has improved. The total
contracted capacity of 7.6 megawatt ("MW") is expected to be
sufficient to provide power for the life of mine.
Effective November 1, 2022, the
Company declared commercial production at Las Chispas, based on
achieving a continuous two-month period operating the processing
plant at a minimum of 80% capacity for its name plate design of
1,250 tpd or 1,000 tpd and showing a combined gold and silver
recovery of greater than 85%.
In 2022, an additional 8.0 km of underground development was
completed at the Mine. The average mining rate for Q4, 2022 was 700
tpd, below original guidance of 750 tpd, but in line with the
Company's revised guidance of 600 to 700 tpd.
A total of an estimated 201,100 tonnes of ore were mined from
development and stoping activities in 2022, below the 2021
Feasibility Study projection of an estimated 214,400 tonnes. The
variance was a result of lower productivity in resue mining stopes
due to safety concerns and narrower vein widths in some areas. Long
hole mining has progressed well and has achieved production and
dilution rates as set out in the Feasibility Study.
Resue mining represented 22% of the tonnage in the 2022 mine
plan and 12% in the 2021 Feasibility Study life of mine. As
previously disclosed, SilverCrest decided to reduce the amount of
resue mining utilized at Las Chispas, for safety and productivity
reasons. In Q4, 2022, SilverCrest began converting resue stopes to
cut and fill and expects to eventually convert some to longhole
stopes. This has the potential to increase productivity with a
lower cost mining method but could be offset by a potential
increase to dilution relative to the resue method. During
this period a total of nine stopes originally designated for resue
mining were converted to cut and fill.
In H1, 2023 it is expected that underground mining rates will be
in the range of 650 to 700 tpd as the Company continues to work
with the contractor to ramp-up the mine and outline the appropriate
ramp-up through 2025 for inclusion in upcoming technical report.
Underground mining will be focused on capital development which was
slightly behind schedule in 2022 due to availability of equipment
and labour. Work is underway to rectify these challenges, but it is
expected that a readjustment of the mobile fleet will be required
with the decrease in resue mining.
Grade reconciliation work is advancing internally and will be
included in the Updated Technical Report.
Since commissioning in late May
2022, the Las Chispas processing plant has performed in-line
or ahead of 2021 Feasibility Study expectations on operating
In Q4, 2022 the processing plant continued to perform well as
the Company continued to ramp-up, test and understand the plant's
abilities to operate at higher rates. In the quarter, approximately
104,400 tonnes of ore were processed at a grade of 3.67 gpt Au and
382 gpt Ag, or 701 gpt AgEq. The average throughput in Q4, 2022 was
1,135 tpd which compared to the 2021 Feasibility Study plan of
1,143 tpd. Metallurgical recoveries in Q4, 2022 were 96.9% for Au
and 93.3% for Ag, or 95.0% AgEq and the plant operated at 92.4%
availability. The main operating challenge during the period was
encountered in November 2022 when
only one tailings filter (compared to a planned capacity for two)
was available for the month. The issue has been resolved and both
filters were operational for December
2022. Figure 2 provides an overview of the monthly tonnage
and daily milling rates.
A total of approximately 187,600 tonnes have been processed
since May 2022 startup compared to
the 2021 Feasibility Study estimate of approximately 166,800
tonnes. While the increase in tonnes processed relative to plan
contributed to a reduction in the stockpile relative to the
original plan, the information gained was necessary and valuable
during the commissioning process and ahead of the Updated Technical
Report, especially for the tonnage fed directly from the mine to
the plant as it will add valuable information in the Mine to Plant
Figure 2: Processing Plant Feed
Recoveries in 2022 tracked ahead of the planned ramp-up
projections as shown in Figure 3. To date, recoveries have tracked
above plan in part due to the use of higher consumables. Recoveries
may vary in 2023 as SilverCrest begins to process higher grade
stockpiled and mined ore, optimize consumable usage, implement cost
controls, and refine operating parameters of the plant.
Figure 3: Processing Plant Recovery
Plant availability has continued to increase since the start of
commissioning (Figure 4), with availability in December 2022 of 95.5%. The design Feasibility
Study Plant availability for this period was estimated at 91.3%
Figure 4: Processing Plant Availability
While the processing plant ramp-up has generally been trending
favorably when compared to the 2021 Feasibility Study ramp-up
projections, minor modifications have been required through the
circuit. The main changes were related to lower dissolved oxygen
and premature failure of components in the tailing filters. While
the Ausenco construction mandate was completed, they, along with
the equipment suppliers, have been supportive in correcting these
2022 was a construction and ramp-up year, and having only
reached commercial production on November 1,
2022, accordingly, operating costs are not representative of
a mature and optimized operating mining company. It is expected
that unit operating costs will start being reported in 2023
financials and MD&A.
Throughout the transition to commercial production, costs across
the operation have been impacted by the global inflation trend.
Since the 2021 Feasibility Study estimated costs from a Q3, 2020
basis, Mexico has experienced
inflation of approximately 18% in the last nine quarters, however
many areas of the operation have seen higher levels of
inflation. The areas most impacted by inflation to date have
been plant consumables and labour which have seen, in some cases,
well above average cost increases. Mine operating costs may also be
impacted by changes to underground mining methods, including the
decrease in utilization of the resue mining method.
At the end of 2022, the stockpiles were estimated at 261,600
tonnes below the 2021 Feasibility Study estimate of 311,200 tonnes
due to a combination of higher processing rates offset by lower
mining rates than planned.
The surface stockpiles remain a unique asset that will comprise
a significant amount of the tonnage going to the plant in the early
years of the mine life. The stockpiles provide flexibility during
the ramp-up of the underground mine. The updated stockpile plan
will be determined in conjunction with the rate of tonnes mined and
the conclusions will be released in the Updated Technical
Updated Technical Report
SilverCrest continues to advance the work required to complete
the Updated Technical Report in Q2, 2023. This report will
incorporate updated Mineral Resources and Reserves, updated
metallurgical results, Mine to Plant reconciliation (mine,
stockpile, and plant) including comparison to the 2021 Feasibility
Study Mineral Resource estimate, a revised mine plan, and updated
operating and sustaining costs arising from any potential changes
to the mine plan and the impact of inflation from the Q3, 2020 cost
base used in the 2021 Feasibility Study.
Safety, COVID-19, and Community
Safety remained a top priority at Las Chispas throughout 2022
and this focus resulted in an improvement in our main safety
metrics, LTIFR and total recordable injury frequency rate
("TRIFR"). SilverCrest exited 2022 with an LTIFR of 0.42 and
TRIFR of 3.58 per 200,000 work hours, an improvement from the end
of 2021 rates of 0.63 and 4.11, respectively.
In Q4, 2022 the Company released its TCFD report and water
stewardship plan. These reports focused on identifying and managing
the key risks and opportunities for our stakeholders and helped in
developing a multi-year major water infrastructure project that is
focused on improving the sewage system and the water infrastructure
for the local community, ranching, and farming industries. This
investment, which began in 2022, includes upgrades to three main
infrastructure areas which were considered priorities in discussion
with the local community, and will continue in 2023.
Q4, 2022 and 2023 Exploration
In the quarter, exploration at Las Chispas focused on assisting
operations with database management, grade control, drilling on new
veins targets and delineation drilling of planned mining
stopes. El Picacho
("Picacho") exploration focused on surface generative work on new
For 2022, exploration at Las Chispas focused on the transition
to production through further infill and delineation drilling of
planned mining stopes. Results of drilling completed to the end of
July 2022 will be included in the
mineral reserve estimate for the Updated Technical Report. There
are currently four surface and underground exploration drills
active at Las Chispas. Picacho exploration focused on expansion and
infill drilling of current areas for potential mineral resources.
There are currently no drill rigs active at
The Company's 2023 exploration budget will remain conservative
until details from the Updated Technical Report emerge and will be
evaluated on a half year basis. The H1, 2023 budget is
approximately $4 million and will
focus on mapping and sampling unexplored areas around Las Chispas
and Picacho to generate new targets for drilling consideration in
H2, 2023. Limited drilling has been completed outside of the known
mineralized zones, as SilverCrest remains focused on prudent
capital allocation during ramp-up. Results for 2022 exploration
work will be announced in H1, 2023.
As of December 31, 2022,
SilverCrest had cash and cash equivalents of $50.8 million. During Q4, 2022 SilverCrest
refinanced its $90 million project
finance facility with a lower rate bank facility and used
$40 million of cash to reduce the
total debt outstanding to $50
million. Quarterly repayments on this facility will begin in
June 2023. The Company also has
access to a $70 million revolving
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 producer headquartered
in Vancouver, BC, that is focused
on new exploration discoveries, value-added acquisitions, and
production assets in Mexico's
historic precious metal districts. The Company's principal focus is
operating its Las Chispas Mine, in Sonora, Mexico. SilverCrest's ongoing
initiative is to increase its asset base by expanding current
resources and reserves, acquiring, and developing high value
precious metals projects and ultimately operating multiple
silver-gold mines in the Americas. 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.
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 completing a technical report update by Q2, 2023;
publishing its inaugural ESG report in 2023; mining during H1, 2023
at a rate of 650 tpd to 700 tpd; having stable and sufficient power
throughout the life of mine from the powerline; and generating new
targets for drilling consideration in H2, 2023 at Las Chispas and
Picacho through execution of its H1, 2023 budget. 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: present and future business
strategies, the environment in which the Company will operate in
the future, including the price of gold and silver, estimates of
capital and operating costs, production estimates, estimates of
mineral resources and metallurgical recoveries and mining
operational risk; the reliability of mineralization estimates,
mining and development costs, the conditions in general economic
and financial markets; availability of skilled labour; timing and
amount of expenditures related to exploration 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: 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; fluctuations in gold
and silver prices 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,
Chief Executive Officer
SilverCrest Metals Inc.
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