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SilverCrest Reports Q1 2012 Financial Results
Cash Flow from Operations of $12.2 million ($0.14 per share)
TSX-V: SVL OTCQX: STVZF
For Immediate Release
Dear Subscriber,
VANCOUVER, B.C.
May 15, 2012 – SilverCrest Mines Inc.
(the “Company”)
is pleased to announce its financial results for the first quarter
ended March 31, 2012 (all figures in U.S.
dollars unless otherwise
specified.)
Q1 2012 FINANCIAL HIGHLIGHTS:
- Cash flow from operations (1) $12.2 million ($0.14 per
share)
- Cash operating cost per silver equivalent $7.00
ounce sold (2)
- Revenues reported - IFRS (3) $19.6 million
- Comprehensive earnings $6.3 million ($0.07 per
share)
- Cash, cash equivalents and short term $36.5 million (at March 31,
investments 2012)
J.
Scott Drever, President stated; "We had an excellent beginning for
2012.
In Q1 we sold 641,546 silver equivalent ounces, with an average
cash operating costs of $7.00 per ounce.
The Santa Elena open pit heap
leach mine operations continue to perform well and generated cash flows
of $12.2 million which will help finance the Santa Elena Expansion plan
to double metals production by 2014 and accelerate the exploration and
development of our polymetallic La Joya Project.
During the first
quarter, total production was consistent with our plan and cash
operating costs were below plan.
As a result, we are confident in
achieving our 2012 guidance of production of 435,000 silver ounces and
33,000 gold ounces at an average cash operating cost of $8.20 per
silver equivalent ounce."
----------------------------------------------------------------------------
Financial and Operating Highlights: Q1 2012 Q1 2011
----------------------------------------------------------------------------
Cash flow from operations (1) $ 12,231,163 $ (52,660)
Cash flow from operations (1) per share $ 0.14 $ (0.00)
Cash operating cost per silver equivalent
ounce sold (2) $ 7.00 -
Revenues (3)
Silver revenue $ 4,699,470 -
Gold revenue - cash basis $ 13,077,221 -
----------------------------------------------------------------------------
$ 17,776,691 -
Gold revenue - non cash
- adjustment to market spot price $ 1,088,230 -
- amortization of deferred revenue $ 734,649 -
----------------------------------------------------------------------------
Revenues reported $ 19,599,570 -
Cost of sales $ (4,491,131) -
Depletion, depreciation and accretion $ (1,483,841) -
----------------------------------------------------------------------------
Mine operating earnings $ 13,624,598 -
Loss on derivative instruments $ (2,642,756) $ (2,398,952)
Other net expenses $ (1,186,322) $ (961,309)
Taxes $ (3,725,000) -
Exchange gain on translation to US Dollars $ 272,821 $ 538,351
----------------------------------------------------------------------------
Comprehensive earnings (loss) $ 6,343,341 $ (2,821,910)
Weighted average number of common shares
outstanding 87,861,072 66,927,998
Comprehensive earnings (loss) per share -
basic $ 0.07 $ (0.04)
----------------------------------------------------------------------------
Silver ounces sold 139,771 57,569
Gold ounces sold 9,788 2,333
Silver equivalent ounces sold (2) 641,546 146,219
Silver ounces produced 134,528 64,712
Gold ounces produced 9,405 3,152
Silver equivalent ounces produced (2) 616,668 184,483
Ag : Au Ratio (2) 51.2:1 38:1
----------------------------------------------------------------------------
(1) Cash flow from operations before changes in working capital items.
(2) This is a Non-IFRS performance measure.
Silver equivalent ounces consist
of the number of ounces of silver production plus the number of ounces of
gold production multiplied by the ratio of the spot gold price to the spot
silver price at the quarter end dates.
Variance in sold versus produced is based on carry forward inventory from Q4
2011.
(3) IFRS 18 - Revenue, states revenue should be recorded at its fair value,
which for gold and silver is the market spot price on the date revenue is
recognized.
The information in this news release should be read in conjunction with
the Companys unaudited condensed consolidated interim financial
statements for the three months ended March 31, 2012 and associated
MD&A which are available from the Companys website at
[2]www.silvercrestmines.com and under the Companys profile on SEDAR at
[3]www.sedar.com.
Links:
2.
http://www.silvercrestmines.com
3.
http://www.sedar.com
Three months ended March 31, 2012
During the quarter ended March 31, 2012, reported revenue amounted to
$19,599,570 (2011 - $Nil), which included $17,776,691 (2011 -
$3,810,044, capitalized) in silver and gold revenues on a cash basis,
non-cash revenues of $1,088,230 (2011 - $865,038, capitalized) for
adjustments to gold spot market prices related to hedge facility
deliveries, and $734,649 (2011 - $180,955, capitalized) for
amortization of deferred revenues related to payments under the
Sandstorm Agreement.
The non cash amount of $1,088,230 represents the
difference between the market spot price at the date of delivery for
gold (at an average realized price of $1,727.50 per ounce) and the
hedge price of $926.50 per ounce settled as required by IFRS accounting
policies.
Silver sales were 139,771 ounces (2011 - 57,569) at an average realized
price of $32.62 (2011 - $33.32).
All silver production is unencumbered
and sold at spot prices.
Gold sales were 9,788 ounces (2011 - 2,333).
Gold delivered into the
Hedging Facility was 1,359 ounces (2011 - 1,866) at an average realized
price of $925.93 (2011 - $926.15).
Gold delivered to Sandstorm was
1,958 ounces (2011 - 467) at an average realized gold price of $725.29
(2011 - $737.84) for which the Company recorded revenues of $1,419,794
(2011 - $344,253, capitalized) consisting of $685,145 (2011 - $163,298)
in cash received and $734,649 (2011 - $180,955) from amortization of
deferred revenue.
The Company sold 6,471 gold ounces (2011 - Nil) at
market spot realized price of $1,720.45 (2011 - $Nil) per ounce.
Cost of sales amounted to $4,491,131 (2011 - $2,940,598 capitalized).
Cash cost per silver equivalent ounce sold amounted to $7.00.
General and administrative expenses increased to $1,172,197 (2011 -
$619,424) primarily due to an increase in remuneration and corporate
expenditures in Vancouver and Mexico.
Loss on derivative instruments amounted to $2,642,756 (2011 -
$2,398,952) using the gold forward price of $1,671 (2011 - $1,456).
Under IFRS the Companys 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 loss relates to
the incremental fair value of the Macquarie Bank 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.
The income tax expense of $3,725,000 (2011 - $Nil) is the estimated
first quarter tax payable from Santa Elena operations.
Comprehensive earnings were $6,343,341 or $0.07 per common share
compared to a comprehensive loss of $2,821,910 or ($0.04) per common
share in 2011.
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 Companys
financial results and performance.
Please refer to the Companys MD&A
for the three month period ended March 31, 2012, for a reconciliation
of this measure to reported IFRS results.
OUTLOOK FOR 2012
For 2012, SilverCrests immediate focus is to continue to efficiently
operate its flagship Santa Elena open pit silver and gold mine, realize
the full potential and value of the Santa Elena mine by diligently
implementing the three year expansion plan to double metals production,
and to rapidly advance the delineation of a large polymetallic deposit
at the La Joya Property.
The specific targets are expected to be as
follows:
Santa Elena Open Pit Production
* Estimated annual production, 33,000 gold ounces and 435,000 silver
ounces; (Q1 2012; 9,405 gold ounces and 134,528 silver ounces).
* Expected operating costs of $18.5 million; (Q1 2012; $4.49 million
including inventory adjustment).
* Estimated cash operating cost of $8.20 per ounce silver equivalent
sold (55:1 Ag:Au); (Q1 2012; $7.00 per ounce silver equivalent).
* Estimated sustaining capital expenditure of $1.5 million, reduced
from $2.5 million; (Q1 2012; approx $220k incurred).
* Estimated operating cash flow in excess of $2 million per month,
based on $1,600 per ounce of gold, $30 per ounce of silver; (Q1
2012; actual $4.06 million per month).
Santa Elena Expansion
* Collar underground decline in January, 2012; (achieved).
* Complete underground development, including main ramp and
exploration drifts, of approximately 2,350meters; (commenced, Q1
2012; 200 metres).
* Secure long lead time items for mill and initiate tank fabrication;
(commenced).
* Basic and detailed engineering for mill facility completed by Q1
2013; (commenced).
* Complete Pre-Feasibility Study on Cruz de Mayo satellite deposit as
part of the Expansion Plan; (commenced).
* Complete Pre-Feasibility Study on Expansion Plan (underground and
mill); (commenced).
* Drill Santa Elena at along strike and depth to expand underground
resources; (commenced).
* Continue site exploration for further discoveries; (commenced).
* Budgeted capital expenditure for 2012 estimated at $20 million
including expansion plan and exploration; (Q1 2012; approx $640k
incurred).
La Joya Project
* Complete Phase II drilling program of approximately 80 holes: core
(60) and reverse circulation (20) drill holes; (commenced, Q1 2012;
15 core holes).
* Explore the Coloradito, Esperanza and Santo Nino targets, which are
adjacent to the MMT; (commenced).
* Complete revised resource estimation using Phase II results by Q4
2012;
* $6 million budget for exploration through December 31, 2012.
(Q1
2012; Phase II program approximately $1.21 million incurred).
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 VENTURE:SVL)(OTCQX:STVZF)(PINKSHEETS:STVZF)
is a Mexican precious metals producer with headquarters based in
Vancouver, BC.
SilverCrests flagship property is the 100%-owned Santa
Elena Mine, which is located 150 km northeast of Hermosillo, near
Banamichi in the State of Sonora, México.
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, Mexico.
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 Companys anticipated results and developments
in the Companys 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
Companys 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 Companys status as a foreign private
issuer in the United States; risks related to all of the Companys
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 Companys 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: [4]
Website: [5]www.silvercrestmines.com
Toll Free: 1-866-691-1730 (Canada & USA)
Links:
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http://www.silvercrestmines.com
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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SilverCrest Mines Inc.
- 570 Granville St., Suite 501 V6C 3P1,
Vancouver BC
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