VANCOUVER, BRITISH COLUMBIA - March 14, 2013 (Investorideas.com Mining Stocks Newswire) SilverCrest Mines Inc. (
TSX.V:SVL) (
NYSE MKT: SVLC) (
CW5.F)
("SilverCrest" or the "Company") is pleased to announce its audited
consolidated financial results for the year and fourth quarter ended
December 31, 2012 (all figures in U.S. dollars unless otherwise
specified). The information in this news release should be read in
conjunction with the Company''s audited consolidated financial
statements for the year ended December 31, 2012 and associated
management discussion and analysis ("MD&A") which are available from
the Company''s website at
www.silvercrestmines.com and under the Company''s profile on SEDAR at www.sedar.com.
2012 YEAR END FINANCIAL HIGHLIGHTS:
J. Scott Drever, President stated; "We are extremely pleased with
the financial performance achieved in 2012. It is rewarding to deliver
strong financial results that mirror Santa Elena''s production
performance. Our management group in Vancouver and operating team in
Mexico continue to do an excellent job and should be congratulated for
achieving cash flow of $0.44 per share and earnings of $0.33 per share.
We look forward to another strong financial year in 2013, with an
expected increase in silver production to 625,000 ounces, consistent
gold production at 33,000 ounces and cash costs remaining steady at or
below $8.50 per silver equivalent ounce."
FINANCIAL AND OPERATING HIGHLIGHTS:
(1) Cash flow from operations before changes in working capital items.
(2) This is a Non-IFRS performance measure. Silver equivalence is a
weighted volume average based on market spot prices per ounce of gold
and silver at the quarter end dates. The 2011 number excludes the costs
and ounces sold in the first quarter of 2011, as prior to commercial
production date of April 1, 2011 operating revenues and expenses were
capitalized to the Santa Elena Mine.
(3) IFRS 18 - Revenue should be recorded at its fair value, which
for gold and silver is the market spot price on the date revenue is
recognized.
(4) With the Hedging Facility fully repaid in November, 2012, this
non-cash adjustment will be eliminated in future reporting periods.
Fourth Quarter ended December 31, 2012
Net earnings were $13,616,028 ($0.14 per share basic) for the
fourth quarter compared with $9,863,459 ($0.11 per share basic) in 2011.
The increase in net earnings was mainly driven by a reduction in annual
Mexican income tax estimate. The settlement of the Hedging Facility
during the fourth quarter made the Company eligible for current income
tax deduction.
Silver and gold revenues totalled $18,243,732 (2011 - $18,258,349)
in the fourth quarter. Silver and gold revenues on a cash basis
increased by 47% to $17,609,949 (2011 - $12,002,316), from record silver
sales and more gold sales realized at market spot prices. Silver sales
were a quarterly record of 171,714 ounces (2011 - 120,199), or 43%
higher than during the same period in 2011. The average realized price
received was consistent at $32 (2011 - $32) per ounce.
Gold sales were 8,444 ounces (2011 - 9,702) or 13% below 2011. The
Company sold 6,755 gold ounces (2011 - 400) at market spot realized
prices of $1,706 (2011 - $1,744) per ounce. There were no gold ounces
(2011 - 7,362) delivered into the Hedging Facility at $926.50 per ounce
as the Facility was settled in cash from a portion of the proceeds of
the $34.5 million prospectus offering. The Company delivered 1,689 gold
ounces (2011 - 1,940) to Sandstorm at $350 per ounce. Non-cash gold
revenues attributed to deferred revenue totaled $633,783 (2011 -
$728,209). The non-cash amount attributed to the Hedging Facility
deliveries in the fourth quarter was $nil (2011 - $5,527,824). The
non-cash amounts with respect to the Hedging Facility represented the
difference between the market spot price at the date of delivery of gold
(2011- average realized price of $1,676 per ounce) and the hedge price
of $926.50 per ounce settled.
Cost of sales amounted to $5,156,489 (2011 - $3,764,200). Cash cost
per silver equivalent ounce sold amounted to $8.05, Au:Ag 55.6:1 (2011 -
$5.65, (Au:Ag 56.3:1), Corporate market guidance for 2012 was $8.20 per
silver equivalent ounce, (Au:Ag 55:1)) (This is a NON-IFRS Performance
Measure). The main drivers in the increase of cash cost per silver
equivalent ounce sold from previous 2012 quarters were higher overall
operating costs based on lower grade ore mined using a lower cutoff
grade (0.2 gpt Au equivalent versus 0.38 used in 2011), and salary and
other benefit increases, which corresponded to an increase in the
average silver equivalent ounce value loaded on the leach pad and
recorded in cost of sales. General and administrative expenses increased
to $2,106,039 (2011 - $1,705,554) primarily due to an increase in
remuneration, bonus payments and regulatory expenses for now being dual
listed on the TSX-V and NYSE MKT.
In the fourth quarter, current income tax recovery (expense)
amounted to $3,494,000 (2011 - ($985,000)), mainly from the eligible
deduction for income tax purposes of the Hedging Facility cash
settlement. Deferred tax expense amounted to $781,000 (2011 - $364,000),
primarily from recognizing an income tax deduction on exploration
drilling and related costs incurred during the quarter at Santa Elena
and the Cruz de Mayo.
Year ended December 31, 2012
Net earnings were $30,475,744 ($0.33 per share basic) for 2012,
compared with $9,456,419 ($0.12 per share basic) in 2011. The
significant increase in net earnings is driven by continued improvements
in operating performance since commercial production was declared
during the second quarter of 2011.
Revenues from silver and gold sales totalled $70,520,085 (2011 -
$41,870,124) for 2012, which includes $63,456,934 (2011 - $31,839,825)
received on a cash basis, $4,448,553 (2011 - $13,081,984) of non-cash
revenues due to adjustments to gold spot market prices related to
Hedging Facility deliveries and $2,614,598 (2011 - $1,804,352) related
to amortization of deferred revenues associated with the Sandstorm
Agreement.
SilverCrest sold 588,312 ounces of silver (2011 - 344,724), 71%
higher than 2011 at average realized prices of $32 (2011 - $35) per
ounce. SilverCrest sold 34,834 ounces of gold (2011 - 23,962), 45%
higher than 2011. The Company sold 21,383 ounces of gold (2011 - 400) at
market spot realized price of $1,703 (2011 - $1,744) per ounce. The
Company delivered 6,484 ounces of gold (2011 - 18,769) into the Hedging
Facility at $926.50 per ounce before it was fully settled in November,
and delivered 6,967 ounces of gold (2011 - 4,793) to Sandstorm at $350
per ounce.
Non-cash gold revenues totalled $7,063,151 (2011 - $14,886,336).
Gold delivered into the Hedging Facility totalled 6,484 ounces (2011 -
18,769) at an average realized price of $925 (2011 - $926). The non cash
amount reported of $4,448,553 (2011 - $13,081,984) represents the
difference between the market spot price at the date of delivery for
gold (at an average realized price of $1,611 (2011 - $1,588) per ounce)
and the hedge price of $926.50 per ounce settled. Amortization of
deferred revenue associated with the Sandstorm Agreement was $2,614,598
(2011 - $1,804,352).
Cost of sales amounted to $18,307,681 (2011 - $9,526,888). Cash
cost per silver equivalent ounce sold amounted to $7.39, Au:Ag 54.3:1
(2011 - $6.07, (Au:Ag 50.4:1), Corporate market guidance for 2012 was
$8.20 per silver equivalent ounce, (Au:Ag 55:1)). (This is a NON-IFRS
Performance Measure). General and administrative expenses increased to
$5,568,582 (2011 - $4,093,438) primarily from increased compensation and
bonuses for management and employees, additional fees for listing on
NYSE MKT (trading commenced in August, 2012) and the TSX-V as well as
greater attendance at tradeshows, conferences and investor presentations
in Europe and throughout North America. Cash cost per silver equivalent
ounce sold for the year of $7.39 was approximately 10% better than
market guidance of $8.20.
Loss on derivative instruments amounted to $3,839,146 (2011 -
$11,497,957). With the Hedging Facility now fully repaid, this non-cash
adjustment will be eliminated in future reporting periods.
Current income tax expense amounted to $4,156,000 (2011 -
$985,000), which relates to the estimate of annual tax payable from
Santa Elena operations. SilverCrest has prepaid $1,841,000 in cash, and
$2,315,000 by offset of Mexican value added tax receivable. There was no
outstanding tax payable at December 31, 2012. Deferred tax expense
increased to $1,261,000 (2011 - $364,000) primarily from recognizing an
income tax deduction on exploration drilling and related costs incurred
in 2012 at Santa Elena and Cruz de Mayo.
Exchange gain (loss) on translation to US Dollars amounted to
$561,523 (2011 - ($1,022,390)), due to the strength in 2012, of the
Canadian dollar against the US dollar. The value of the Company''s
Canadian assets were translated at US$1.00 = CAD$1.0167 at December 31,
2011, and US$1.00 = CAD$0.9949 at December 31, 2012.
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 provides this measure to
provide additional information regarding the Company''s financial
results and performance. Please refer to the Company''s MD&A for the
year ended December 31, 2012, for a reconciliation of this measure to
reported IFRS results.
OUTLOOK FOR 2013
For 2013, SilverCrest''s immediate focus is to continue to
efficiently operate its flagship Santa Elena low cost open pit silver
and gold mine, complete the construction of a new 3,000 tonne per day
mill facility on schedule and on budget, announce the revised Santa
Elena Resources, Reserves and Life of Mine Plan ("LOMP") and to rapidly
advance the delineation of a large polymetallic deposit at the La Joya
Property by completing a Preliminary Economic Assessment ("PEA") and
further definition drilling of the 198 million ounce silver equivalent
resource. Specific corporate targets are as follows:
Santa Elena Open Pit Production Targets
- Estimated annual production of 625,000 ounces of silver and 33,000
ounces of gold (2.4 million ounces of silver equivalent, Ag:Au 55:1).
- Estimated annual operating costs of $20.7 million.
- Estimated cash operating cost of $8.50 per ounce silver equivalent sold (Ag:Au 55:1).
- Estimated operational sustaining capital expenditure of $1.0 million.
Santa Elena Expansion Targets
- Complete construction of new conventional 3,000 tpd CCD processing facility on schedule (Q1-2014) and on budget ($53.2 million).
- Complete underground development of main ramp that will enable
physical access to ore underground for direct mill feed commencing in
H2-2014. Budget for 2013 is $7.8 million.
- Complete Pre-Feasibility Study on the Expansion Plan (mill,
underground and re-processing leach pad material) including Resource,
Reserve and LOMP revisions for filing in Q2-2013.
- Complete Detailed Engineering on the Expansion Plan in Q2-2013.
- Complete surface drilling of approximately 15,000 metres to expand
additional resources - Capital assigned for 2013 is $3.2 million.
La Joya Project Targets
- File Updated Resource Estimate NI43-101 Technical Report in Q1 2013.
- Complete and File a PEA NI43-101 Technical Report evaluating the high grade portion of the deposit as a potential "Starter" Pit.
- Complete Phase III drilling program of approximately 80 holes:
core (60) and reverse circulation (20) drill holes for in-fill and
expansion of current resources. Budget for 2013 is $6 million.
- Complete final staged payments under the La Joya agreements to
acquire 100 % of the mineral concessions under agreement for purchase
and sale.
- Continue to explore the Coloradito, La Esperanza and Santo Nino targets which are adjacent to the Main Mineralized Trend.
- Explore newly defined geophysical targets; La Paloma and El Pino within the current land position.
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-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
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