VANCOUVER, BRITISH COLUMBIA - November 14, 2012 (Investorideas.com Mining Stocks Newswire) SilverCrest Mines Inc. (
TSX.V:SVL ) (
NYSE MKT: SVLC ) is pleased to announce its financial results for the third quarter ended September 30, 2012 (all figures in
U.S. dollars unless otherwise specified).
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."
Comparison of Q3, 2012, to Q3, 2011
Comprehensive earnings were $2,213,154 ($0.03 per share basic)
compared with $81,856 ($0.00 per share basic) for the same period in
2011. The increase in comprehensive earnings was largely driven by
greater volumes of silver sales and an exchange gain on translation to
US Dollars and partially offset by a negative marked-to-market
derivative impact and recognizing income and deferred tax expense.
In the third quarter 2012, silver and gold revenues totalled
$16,694,752 (2011 - $15,055,514), an 11% increase compared with the same
quarter in 2011. Silver and gold revenues on a cash basis increased by
58% to $15,469,381 (2011 - $9,801,740). Gold revenues include non-cash
amounts of $630,666 (2011 - $4,681,312) from adjustments to gold spot
market prices related to hedge facility deliveries and $594,705 (2011 -
$572,462) related to amortization of deferred revenues associated with
the Sandstorm Agreement.
Silver sales were a quarterly record of 152,088 ounces (2011 -
96,631), or 57% higher than the same quarter in 2011. The average
realized price received was $32 (2011 - $37). All silver production is
unencumbered by hedging arrangements and sold at spot prices.
Gold sales were 7,923 ounces (2011 - 7,627) or 4% above the same
quarter in 2011. The Company sold 5,422 gold ounces (2011 - Nil) at
market spot realized prices of $1,707 (2011 - $Nil) per ounce. Gold
delivered into the Hedging Facility was 916 ounces (2011 - 6,102) at an
average realized price of $925 (2011 - $926). The non cash amount
reported of $630,666 (2011 - $4,681,312) represents the difference
between the market spot price at the date of delivery for gold (at an
average realized price of $1,613 (2011 - $1,693) per ounce) and the
hedge price of $926.50 per ounce settled. This non-cash revenue reported
is required by IFRS accounting policies. Gold delivered to Sandstorm
was 1,585 ounces (2011 - 1,525) at an average realized gold price of
$725 (2011 - $725) for which the Company recorded revenues of $1,149,337
(2011 - $1,106,351) consisting of $554,632 (2011 - $533,889) in cash
received and $594,705 (2011 - $572,462) from amortization of deferred
revenue.
Cost of sales amounted to $4,239,773 (2011 - $3,652,887). Cash cost
per silver equivalent ounce sold amounted to$7.60, Au:Ag 51.2:1 (2011 -
$7.27, Au:Ag 53.2:1). This is a NON-IFRS Performance Measure. The main
drivers in the change of cash cost per silver equivalent ounce sold are
increases/decreases to operating costs, changes in volumes of metals
produced and fluctuations in the silver to gold ratio.
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
Mine operating earnings were up 9% to $11 million, as a result of
increases in realized prices. Comprehensive earnings however, were down
76% to $2.2 million ($0.03 per share), from $9.2 million ($0.10 per
share) primarily from a non-cash loss on derivatives, an increase in
current and deferred tax expense, which was partially offset by an
exchange gain on translation to US Dollars.
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 .
NON-IFRS PERFORMANCE MEASURES
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.
N. Eric Fier, CPG, P.Eng. and Chief Operating Officer for
SilverCrest Mines Inc. and Qualified Person for this news release has
reviewed and approved its contents.
SilverCrest Mines Inc. (TSX-V: SVL; NYSE MKT: 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.
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 the Company's status as a foreign private issuer in the United
States; 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.
Contact:
SilverCrest Mines Inc.
Fred Cooper
(604) 694-1730 ext. 108
Toll Free: 1-866-691-1730
(604) 694-1761 (FAX)
info@silvercrestmines.comwww.silvercrestmines.com570 Granville Street, Suite 501
Vancouver, British Columbia V6C 3P1
Neither TSX Venture Exchange nor its Regulation Services Provider
(as defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
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