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Title
TSX-V SVL
For Immediate Release
Dear Subscriber,
VANCOUVER, B.C.
November 29, 2011 SilverCrest Mines Inc.
(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.
Financial Highlights
Three months ended Three months ended
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 $6,583,455 $4,296,517
before loss on non-cash
derivative instruments
Comprehensive earnings $81,856 $790,429
Comprehensive Earnings/share $0.00 $0.01
Cash flow from operations $5,129,814 $3,113,371
before changes in working
capital items
Cash and cash equivalents $32,122,284 $33,320,876
Cash operating cost per $7.27 $8.27
silver 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-V: 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, México.
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"
J.
Scott Drever, President
For further information, please contact:
Fred Cooper
570 Granville Street, Suite 501
Vancouver, BC V6C 3P1
Telephone: (604) 694-1730
Fax: (604) 694-1761
Email: [2]
Website: [3]www.silvercrestmines.com
Toll Free: 1-866-691-1730 (Canada & USA)
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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.
SilverCrest Mines Inc.
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- 570 Granville St., Suite 501 V6C 3P1, Vancouver BC
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