SilverCrest Mines Inc. (TSX VENTURE:SVL)(OTCQX:STVZF)(PINK
SHEETS:STVZF) (the "Company" or "SilverCrest") is pleased to
announce strong positive cash flow, earnings and operating results
for its third quarter ended September 30, 2011, being the second
quarter of commercial production at its Santa Elena Mine in Sonora,
Mexico. This press release should be read in conjunction with the
Company's Management Discussion & Analysis, Condensed
Consolidated Interim Financial Statements and Notes to Financial
Statements for the nine month period ended September 30, 2011,
available on the Company's website at www.silvercrestmines.com and
on SEDAR at www.sedar.com. All monetary figures are expressed in
United States dollars unless otherwise specified.
The results for the three month period ended September 30, 2011
is the second quarter SilverCrest has reported production revenues
and expenses. First Quarter revenues and expenses were capitalized
to Santa Elena Mine assets.
Three months ended Three months ended
Financial Highlights September 30, 2011 June 30, 2011
Revenue reported $15,055,514 $8,556,261
Mine operating earnings (1) $10,286,196 $5,705,087
Comprehensive earnings before loss $6,583,455 $4,296,517
on non-cash derivative instruments
Comprehensive earnings $81,856 $790,429
Comprehensive Earnings per share $0.00 $0.01
Cash flow from operations before $5,129,814 $3,113,371
changes in working capital items
Cash and cash equivalents $32,122,284 $33,320,876
Cash operating cost per silver $7.27 $8.27
equivalent ounce sold (2) (3)
Operating Highlights
Tonnes of ore mined 248,192 249,217
Tonnes of waste mined 1,058,909 707,553
Waste/Ore ratio 4.27 2.84
Ounces of silver produced 106,636 74,678
Ounces of gold produced 8,805 5,476
Ounces of silver sold 96,631 70,326
Ounces of gold sold 6,102 4,300
(1) Mine operating earnings have not been adjusted for non cash revenue
which consists of $4,681,312 (June 30 - $2,007,810) from derivative
instruments and $572,462 (June 30 - $322,725) from deferred revenue.
(2) At September 30, silver equivalence was calculated using market spot
rates of $1,620 (June 30 - $1,505.50) per gold ounce and $30.45 (June
30 - $35.02) per silver ounce.
(3) This is a Non-IFRS performance measure. Please refer to Company's
Management Discussion and Analysis for further discussion.
Highlights for the Third Quarter Ended September 30, 2011
Third Quarter Financial Highlights
Revenues reported from the Santa Elena Mine amounted to
$15,055,514 (June 30 - $8,556,261). Silver sales were 96,631 (June
30 - 70,325) ounces at an average realized price of $37.44 (June 30
- $38.90). Gold delivered into the Macquarie Bank Ltd. ("MBL")
Hedging Facility was 6,102 (June 30 - 3,440) ounces at an average
realized price of $926.50. Included in revenue is a non cash amount
of $4,681,312 (June 30 - $2,007,810) representing the difference
between the market spot price at the date of delivery for gold and
the hedge price of $926.50 per ounce settled in the quarter. The
quarterly average market spot price at the time of delivery was
$1,694 (June 30 - $1,510). The Company also recorded gold sales of
$1,106,351 (June 30 - $623,705) related to the delivery of 1,525
(June 30 - 860) gold ounces to Sandstorm Gold Ltd. ("Sandstorm"),
which consists of $533,889 (June 30 - $300,979) in cash received
and $572,462 (June 30 - $322,725) from amortization of deferred
revenue.
Cost of sales amounted to $3,652,887 (June 30 - $2,109,801)
which is a cash operating cost of $7.27 (June 30 - $8.27) per
silver equivalent ounce sold. Cash operating costs for the quarter
were lower than the Santa Elena Life of Mine budget projections.
Depreciation, depletion and accretion amounted to $1,116,431 (June
30 - $741,373) which resulted in mine operating earnings for the
quarter of $10,286,196 (June 30 - $5,705,087).
Other net expense items amounted to $10,204,340 (June 30 -
$4,914,658) which primarily relates to loss on derivative
instruments of $6,501,599 (June 30 - $3,506,089) and exchange loss
(gain) in translation to US Dollars $2,138,668 (June 30 -
(57,731)). The Company used 0.9643 (CAD Dollar) at June 30, and
1.0389 (CAD Dollar) at September 30, to translate the financial
assets and liabilities to US Dollars.
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. At September 30,
the Company's derivative instruments were calculated using a
forward gold price of approximately $1,630 (June 30 - $1,517) per
ounce.
Comprehensive earnings for the quarter were $81,856 (June 30 -
$790,429) or $.00 (June 30 -$.01) per share.
The Company made a loan repayment of $3.3 million from Santa
Elena production revenues to MBL and subsequent to September 30,
made an additional repayment of $2.3 million from production
revenues. The Company has no remaining loan obligations for fiscal
2011. The Company expects to accelerate its loan repayment such
that substantially all of the $4.8 million outstanding loan
obligation will be repaid by December 31, 2011.
Cash and cash equivalents were $32.1 million (June 30 - $33.3
million) at September 30, 2011 of which only $1.5 million is
reserved as a Santa Elena Mine funding obligation.
Third Quarter Operating Highlights
Approximately 253,000 tonnes of ore were mined, crushed and
delivered to the pad at the Santa Elena Mine. The high grade ore
(average grade of 2.20 gpt Au and 44.08 gpt Ag) of the Main zone is
now being mined and will provide the bulk of the ore to be mined
for the remainder of 2011. All aspects of the operations are at or
above design capacities, including the crusher. Crusher throughput
averaged 2,755 tonnes per day which is above the design throughput
capacity of 2,500 tpd. Production from Santa Elena mine is expected
to be at a "steady-state" by the end of 2011.
During the Third Quarter, silver production was up 43% to
106,636 ounces and gold production was up 61% to 8,805 ounces
compared to the Second Quarter, with a significant amount of silver
and gold still in solution for processing and recovery. The Company
sold 96,631 ounces of silver and 6,102 ounces of gold, which is a
37% and 42% increase over the Second Quarter, respectively.
The Company delivered 1,525 (June 30 - 860) ounces of gold under
its gold stream contract with Sandstorm, and delivered 6,102 (June
30 - 3,440) ounces under the gold price protection program with
MBL. Results are consistent with the Santa Elena Life of Mine
budget projections for 2011.
J. Scott Drever, President stated; "We are certainly pleased
with the consistent progress being made at both the operational
level at the Santa Elena Mine and the financial results of the
Company. The steady increase in the overall operational statistics
is now being reflected in our financial performance. We have
accelerated our debt repayment and still have been able to maintain
our strong cash position of $32.1 million. This and our substantial
cash flow assures that we can proceed with our 3 year expansion
plan to double production at Santa Elena and to implement the
Company's growth strategy for corporate growth which includes
accelerated exploration of our exciting new La Joya discovery".
Outlook for the remainder of 2011
Santa Elena Expansion
Drilling at the 100%-owned Cruz de Mayo Project, located near
its Santa Elena Mine in Sonora, Mexico, of approximately 45 core
and RVC holes is underway to reclassify and potentially expand
current NI43-101 resources. Approximately 15 holes have been
drilled to date with the remainder to be completed during the first
quarter of 2012. These will be utilized to upgrade the current
resource estimate and to prepare a Preliminary Feasibility Study
(PFS).
The Company has finished drilling the four geotechnical drill
holes at the Santa Elena Mine to help establish geotechnical and
hydrological parameters for the proposed decline and subsequent
underground development. The portal site for the decline has been
selected, and the initial underground contractor proposals for the
Phase I underground work, consisting of approximately 1,800 metres
of main ramp and exploration drifting to commence in January 2012,
are currently being reviewed. The decline will be used to access
the Main (Mineralized) Zone for further delineation drilling and
access the unexplored portions of the Main Zone for the potential
expansion of resources. When completed, the Phase I decline will
allow development and initial production from the deposit that lies
below the ultimate open pit limits. This work is being completed to
a PFS for the Expansion Project which includes construction of a
conventional mill.
La Joya Project
The Company is compiling and validating historical and current
data through an Independent Qualified Person for use in developing
estimated resources and a NI 43-101 Technical Report anticipated by
the end of fiscal 2011. See News Release dated November 14,
2011.
A Phase II drilling program consisting of approximately 60
additional drill holes (in excess of 10,000m) and 20 RVC drill
holes has commenced, is budgeted to cost approximately $3 million
and be completed by mid-2012.
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. (TSX VENTURE:SVL) is a Mexican precious
metals producer with headquarters based in Vancouver, BC.
SilverCrest's flagship property is the 100%-owned Santa Elena Mine,
which is located 150km northeast of Hermosillo, near Banamichi in
the State of Sonora, Mexico. The mine is a high-grade open pit,
epithermal gold and silver producer, with an estimated life of mine
cash cost of $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.
FORWARD-LOOKING STATEMENTS
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.
Forward-looking statements are subject to a variety of known and
unknown risks, uncertainties and other factors which could cause
actual events or results to differ from those expressed or implied
by the forward-looking statements, including, without limitation:
risks related to precious and base metal price fluctuations; risks
related to fluctuations in the currency markets (particularly the
Mexican peso, Canadian dollar and United States dollar); risks
related to the inherently dangerous activity of mining, including
conditions or events beyond our control, and operating or technical
difficulties in mineral exploration, development and mining
activities; uncertainty in the Company's ability to raise financing
and fund the exploration and development of its mineral properties;
uncertainty as to actual capital costs, operating costs, production
and economic returns, and uncertainty that development activities
will result in profitable mining operations; risks related to
reserves and mineral resource figures being estimates based on
interpretations and assumptions which may result in less mineral
production under actual conditions than is currently estimated and
to diminishing quantities or grades of mineral reserves as
properties are mined; risks related to governmental regulations and
obtaining necessary licenses and permits; risks related to the
business being subject to environmental laws and regulations which
may increase costs of doing business and restrict our operations;
risks related to mineral properties being subject to prior
unregistered agreements, transfers, or claims and other defects in
title; risks relating to inadequate insurance or inability to
obtain insurance; risks related to potential litigation; risks
related to the global economy; risks related to environmental laws
risks related to the Company's status as a foreign private issuer;
risks related to all of the Company's properties being located in
Mexico and El Salvador, including political, economic, social and
regulatory instability; and risks related to officers and directors
becoming associated with other natural resource companies which may
give rise to conflicts of interests.
Should one or more of these risks and uncertainties materialize,
or should underlying assumptions prove incorrect, actual results
may vary materially from those described in the forward-looking
statements. The Company's forward-looking statements are based on
beliefs, expectations and opinions of management on the date the
statements are made. For the reasons set forth above, investors
should not place undue reliance on forward-looking statements.
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
SILVERCREST MINES INC.
Neither 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.
Contacts: SilverCrest Mines Inc. Fred Cooper (604) 694-1730 or
Toll Free: 1-866-691-1730 (604) 694-1761
(FAX)info@silvercrestmines.comwww.silvercrestmines.com
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