SilverCrest Announces 2013 Financial Results; Cash Flow From
Operations of US$26.1 Million ($0.24 Per Share); Net Earnings
US$8.5 Million ($0.08 Per Share)
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Mar 24, 2014) -
SilverCrest Mines Inc. (TSX:SVL)(NYSEMKT:SVLC) (the "Company" or
"SilverCrest") is pleased to announce its audited consolidated
financial results for the fourth quarter and year ended December
31, 2013. The fourth quarter and 2013 year end financials results
reflect a one-time non-cash deferred tax accounting adjustment of
$5.8 million as a result of the enactment of the Mexican Tax
Reform. All financial information is prepared in accordance with
IFRS and all dollar amounts are expressed 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, 2013 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.
2013 YEAR END FINANCIAL
HIGHLIGHTS:
• |
Cash flow from operations (1) |
$26.1 million ($0.24 per share) |
• |
Cash operating cost per silver equivalent ounce sold(2) |
$7.78 (Ag:Au 60.5:1) |
• |
Revenues reported |
$54.9 million |
• |
Mine
operating earnings |
$28.9 million |
• |
Deferred tax - Mexican mining royalty |
$5.8 million (non-cash IFRS accounting entry) |
• |
Net
earnings |
$8.5 million ($0.08 per share) |
• |
Cash
and cash equivalents |
$14.4 million (at Dec. 31, 2013) |
• |
Working capital |
$25.4 million (at Dec. 31, 2013) |
• |
Scotiabank Credit Facility |
$40.0 million fully available (at Dec. 31, 2013) |
N. Eric Fier, President and COO stated; "2013 was another
successful year for SilverCrest, notwithstanding the lower precious
metals price environment. The Santa Elena mine delivered strong
production and operating cost performance throughout 2013 which
allowed SilverCrest to deliver robust financial results. Management
are pleased that Santa Elena achieved a cash operating cost of
$7.78 per silver equivalent ounce sold compared to Company guidance
of $8.50 and an all-in sustaining cash cost per silver equivalent
ounce sold(2) of $13.05 which also beat Company guidance of $13.45.
SilverCrest maintained its strong balance sheet through disciplined
cost management and securing a $40 million credit facility with
Scotiabank. SilverCrest will continue to focus on delivering strong
operating results and optimizing our operating cash flow as we
complete the Santa Elena Expansion and increase production in 2014
to approximately 3.3 million to 3.6 million silver equivalent
ounces (Ag:Au 60:1)."
FINANCIAL AND OPERATING HIGHLIGHTS: |
Q4 2013 |
|
Q4 2012 |
|
2013 |
|
2012 |
|
Cash flow from operations (1) (2) |
$ |
4,608,427 |
|
$ |
10,591,964 |
|
$ |
26,090,978 |
|
$ |
40,080,605 |
|
Cash flow from operations (1)(2) per share |
$ |
0.04 |
|
$ |
0.11 |
|
$ |
0.24 |
|
$ |
0.44 |
|
Cash operating cost per silver equivalent ounce sold
(2) |
$ |
7.68 |
|
$ |
8.05 |
|
$ |
7.78 |
|
$ |
7.39 |
|
All-in sustaining cash cost per silver equivalent ounce
sold (2) |
$ |
12.77 |
|
$ |
16.45 |
|
$ |
13.05 |
|
$ |
12.59 |
|
Adjusted earnings per share (2) |
$ |
0.01 |
|
$ |
0.13 |
|
$ |
0.15 |
|
$ |
0.33 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
Silver revenue |
$ |
4,204,643 |
|
$ |
5,496,056 |
|
$ |
17,262,278 |
|
$ |
18,595,436 |
|
|
Gold revenue - cash basis |
$ |
8,793,655 |
|
$ |
12,113,893 |
|
$ |
36,091,784 |
|
$ |
44,861,498 |
|
|
$ |
12,998,298 |
|
$ |
17,609,949 |
|
$ |
53,354,062 |
|
$ |
63,456,934 |
|
Gold revenue - non cash |
|
|
|
|
|
|
|
|
|
|
|
|
|
- adjustment to market spot price (3) |
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
4,448,553 |
|
|
- amortization of deferred revenue |
$ |
616,973 |
|
$ |
633,783 |
|
$ |
2,288,243 |
|
$ |
2,614,598 |
|
|
$ |
13,615,271 |
|
$ |
18,243,732 |
|
$ |
55,642,305 |
|
$ |
70,520,085 |
|
Capitalized to Santa Elena Mine EIP (4) |
$ |
(748,654 |
) |
|
- |
|
$ |
(748,654 |
) |
|
- |
|
Revenues reported |
$ |
12,866,617 |
|
$ |
18,243,732 |
|
$ |
54,893,651 |
|
$ |
70,520,085 |
|
Cost of sales |
$ |
(5,185,211 |
) |
$ |
(5,156,489 |
) |
$ |
(19,895,374 |
) |
$ |
(18,307,681 |
) |
Depletion, depreciation and amortization |
$ |
(1,618,884 |
) |
$ |
(1,484,549 |
) |
$ |
(6,134,532 |
) |
$ |
(5,931,042 |
) |
Mine operating earnings |
$ |
6,062,522 |
|
$ |
11,602,694 |
|
$ |
28,863,745 |
|
$ |
46,281,362 |
|
Gain (loss) on derivative instruments (3) |
$ |
- |
|
$ |
1,569,370 |
|
$ |
- |
|
$ |
(3,839,146 |
) |
Other net income (expenses) |
$ |
(3,156,932 |
) |
$ |
(2,269,036 |
) |
$ |
(7,516,482 |
) |
$ |
(6,549,472 |
) |
Tax recovery (expense)(5) |
$ |
(7,000,000 |
) |
$ |
2,713,000 |
|
$ |
(12,868,000 |
) |
$ |
(5,417,000 |
) |
Net earnings (loss) (5) |
$ |
(4,094,410 |
) |
$ |
13,616,028 |
|
$ |
8,479,263 |
|
$ |
30,475,744 |
|
Exchange (loss) gain on translation to US Dollars |
$ |
(444,318 |
) |
$ |
(300,900 |
) |
$ |
(1,989,460 |
) |
$ |
561,523 |
|
Comprehensive earnings (loss) |
$ |
(4,538,728 |
) |
$ |
13,315,128 |
|
$ |
6,489,803 |
|
$ |
31,037,267 |
|
Weighted average number of common shares
outstanding |
|
108,901,085 |
|
|
100,441,504 |
|
|
108,272,675 |
|
|
91,959,307 |
|
Earnings (loss) per share - basic |
$ |
(0.04 |
) |
$ |
0.14 |
|
$ |
0.08 |
|
$ |
0.33 |
|
Earnings (loss) per share - diluted |
$ |
(0.04 |
) |
$ |
0.13 |
|
$ |
0.08 |
|
$ |
0.32 |
|
Silver ounces sold (4) |
|
194,319 |
|
|
171,714 |
|
|
737,752 |
|
|
588,312 |
|
Gold ounces sold (4) |
|
7,811 |
|
|
8,444 |
|
|
30,078 |
|
|
34,834 |
|
Silver equivalent ounces sold (2) excluding capitalized
U/G ounces |
|
675,597 |
|
|
640,856 |
|
|
2,556,635 |
|
|
2,477,623 |
|
Ag : Au Ratio (2) |
|
61.6:1 |
|
|
55.6:1 |
|
|
60.5:1 |
|
|
54.3:1 |
|
(1) |
Cash
flow from operations before changes in working capital items. |
(2) |
This
is a Non-IFRS performance measure. Refer to "CAUTIONARY NOTE
REGARDING NON-IFRS PERFORMANCE MEASURES". Silver equivalence
is a weighted volume average based on market spot prices per ounce
of gold and silver at the quarter end dates. |
(3) |
With
the Hedging Facility fully repaid in November, 2012, this non-cash
adjustment was eliminated for 2013 reporting periods. |
(4) |
Prior
to completing the commissioning of Santa Elena's underground mine,
proceeds from the sale of silver and gold are capitalized to the
Santa Elena Mine Expansion in Progress ("EIP"). The fourth quarter
and fiscal 2013 totals have been reduced by 13,881 ounces of silver
and 409 ounces of gold that were capitalized to Santa Elena Mine
EIP. |
(5) |
The
net loss in the fourth quarter includes a non‐cash accounting
adjustment of $5.8 million as a result of the recently enacted
Mexican Tax Reform. |
Fourth Quarter ended December 31, 2013
During the fourth quarter, the Company recorded a one-time
non-cash deferred tax accounting adjustment of $5.8 million as a
result of the enactment of the Mexican Tax Reform. The Company has
taken the position that the 7.5% mining royalty is an income tax in
accordance with IFRS for financial reporting purpose, as it is
based on a measure of revenue less certain specified costs. On
substantial enactment, a taxable temporary difference arises, as
property, plant and equipment and exploration and evaluation assets
have book basis but no tax basis for purposes of the royalty. The
Company has recognized a deferred tax liability of $5.8 million as
at December 31, 2013 in respect of this royalty. This deferred tax
liability will be drawn down to $nil as a reduction to tax expense
over the life of mine as the Santa Elena Mine and its related
assets are depleted or depreciated.
Net loss was $4,094,410 ($0.04 per share basic) for the fourth
quarter compared with net earnings of $13,616,028 ($0.14 per share
basic) in 2012. The net loss in the fourth quarter was primarily
attributed to lower revenue resulting from significantly lower
realized prices and the non‐cash deferred tax accounting adjustment
of $5.8 million as a result of the recently enacted Mexican Tax
Reform.
Silver and gold revenue totaled $12,866,617, (2012 -
$18,243,732) in the fourth quarter. Silver sales were a quarterly
record of 208,200 ounces including capitalized underground ounces
(2012 - 171,714), 21% higher than the same period in 2012. The
foregoing, combined with a 37% lower average realized price at $20
(2012 - $32) per ounce, resulted in 23% less silver revenue. Total
gold sales were 8,220 ounces includes capitalized underground
ounces (2012 - 8,444) or 3% below 2012. The Company sold 6,576
(2012 - 6,755) ounces of gold at an average realized price of
$1,250 (2012 - $1,706) per ounce. The foregoing, 27% decline in
realized price, combined with a decline in the ounces of gold sold,
resulted in 29% less gold revenue. The Company delivered 1,644 gold
ounces (2012 - 1,689) under the Sandstorm Purchase Agreement at
$350 per ounce.
Cost of sales amounted to $5,185,211 (2012 - $5,156,489). Cash
cost per silver equivalent ounce sold amounted to $7.68, Ag:Au
61.6:1 (2012 - $8.05, Ag:Au 55.6:1). The decrease in cash cost per
silver equivalent ounce sold is driven generally by lower mining
contractor costs related to a reduction in waste removal. As the
Santa Elena Open Pit nears the end of its life, the strip ratio
dropped to 1.63:1 in the fourth quarter compared to 3.07:1 for the
same period in 2012.
General and administrative expenses increased by 37% to
$2,885,989 (2012 - $2,208,355) primarily due to an increase in
remuneration and other corporate expenses. Remuneration increased
by 37% to $1,581,482 (2012 - $1,158,076) with the addition of new
corporate personnel in Q1, 2013, and higher bonuses paid in
December to management and employees. Tradeshows and travel
increased by 184% to $331,601 (2012 - $116,768) due to an increase
in trade show attendance and an accelerated investor relations
program. Mexico corporate expenses increased by 47% to $259,488
(2012 - $176,440), with additional tax, legal and corporate
activity.
Current income tax expense amounted to $1,580,000, compared to a
recovery of $3,494,000 in 2012. For fiscal 2012, the $23.2 million
Hedging Facility cash settlement was deductible for Mexican income
taxes. Deferred tax expense amounted to $5,420,000 (2012 -
$781,000), primarily attributed to a non‐cash accounting adjustment
in relation to the Mexican Tax Reform. On December 11, 2013, the
Mexican government enacted a tax reform to introduce a mining
royalty effective January 2014.
Year ended December 31, 2013
Net earnings were $8,479,263 ($0.08 per share basic) for the
year ended December 31, 2013, compared with $30,475,744 ($0.33 per
share basic) in 2012. The decrease in net earnings was primarily
driven by a decrease in revenue resulting from lower realized
prices and lower gold sales combined with higher tax expense
recorded compared with 2012 (attributed to the eligible deduction
for income tax purposes in 2012 of the Hedging Facility cash
settlement and the non‐cash accounting adjustment in 2013 of $5.8
million in relation to the Mexican Tax Reform).
Silver and gold revenue totaled $54,893,651 (2012 - $70,520,085)
for fiscal 2013, which includes $53,354,062 (2012 - $63,456,934)
received on a cash basis.
SilverCrest sold 751,633 ounces of silver including capitalized
underground ounces (2012 - 588,312), 28% higher compared to fiscal
2012. The foregoing, combined with a 27% lower average realized
price at $23 (2012 - $32) per ounce, resulted in 7% less silver
revenue for the year. SilverCrest sold 30,487 ounces of gold
including capitalized underground ounces (2012 - 34,834), 12% lower
than fiscal 2012. From this total, the Company sold 24,389 (2012 -
21,383) ounces of gold at an average realized price of $1,392 (2012
- $1,703) per ounce. The foregoing, 18% decline in realized price
resulted in 7% less gold revenue than in 2012. The Company
delivered 6,097 gold ounces (2012 - 6,967) to Sandstorm at $350 per
ounce, and, as the MBL Hedge Facility was settled in 2012, there
were no gold deliveries (2012 - 6,484) at $926.50 per ounce.
Cost of sales amounted to $19,895,374 (2012 - $18,307,681). Cash
cost per silver equivalent ounce sold amounted to $7.78, Ag:Au
60.5:1 (2012 - $7.39, (Ag:Au 54.3:1), 2013 corporate market
guidance estimate was $8.50 per silver equivalent ounce, (Ag:Au
55:1). The increase in 2013 cash cost per silver equivalent ounce
sold was driven by higher mining contractor costs, higher
processing expenses, and greater general administrative costs from
annual salary and benefit increases for mine site personnel.
All-in sustaining cash cost per silver equivalent ounce sold was
$13.05, Ag:Au 60.5:1. Company guidance for 2013 was $13.45 per
silver equivalent ounce sold.
Current income tax expense amounted to $5,450,000 (2012 -
$4,156,000), which relates to the estimate of annual tax payable
from Santa Elena operations. The Company has paid a total of $4.7
million related to 2013 income taxes, $3.1 million by offset of
Mexican value added taxes receivable, and $1.6 million by offset of
2012 income taxes refund. Deferred tax expense amounted to
$7,418,000 (2012 - $1,261,000), primarily attributed to a non‐cash
accounting adjustment of $5.8 million in relation to the Mexican
Tax Reform and recognizing an income tax deduction on 2013 Santa
Elena exploration drilling and related costs, which were
capitalized for book purposes.
Exchange loss on translation to United States dollars amounted
to $1,989,460 (versus an exchange gain of $561,523 in 2012), due to
the significant weakening of the Canadian dollar against the United
States dollar during fiscal 2013. The financial results of the
Company's Canadian operations were translated at US$1.00 =
CAD$0.9949 at December 31, 2012, and US$1.00 = CAD$1.0636 at
December 31, 2013.
OUTLOOK FOR
2014
SilverCrest's 2014 focus is to; (i) continue its efficient
operation of its flagship Santa Elena low cost open pit silver and
gold mine, (ii) complete the Santa Elena Mine expansion with
construction of a new conventional 3,000 tpd CCD/MC mill facility
and initial underground production in 2014, (iii) expand resources
and subsequent reserves at Santa Elena by systematic exploration of
the deposit, (iv) evaluate and acquire exploration properties in
proximity to Santa Elena, (v) complete evaluation of certain
aspects of the La Joya Project to a Pre Feasibility Study level in
2014, and (vi) achieve all-in sustaining cash cost of $11.00 to
$12.00 per silver equivalent ounce sold, Ag:Au 60:1.
Santa Elena
Targets
- Achieve estimated 2014 production guidance of 1.3 million - 1.5
million ounces of silver and 34,000 - 36,000 ounces of gold, for an
aggregate of 3.3 million - 3.6 million ounces of silver equivalent,
Ag:Au 60:1.
- Achieve estimated cash operating cost of $8.50 - $9.50 per
silver equivalent ounce sold, Ag:Au 60:1.
- Complete construction of new conventional 3,000 tpd CCD/MC mill
facility in early Q2 2014 - Budget for 2014 is $14 million.
- Complete underground decline development of main ramp to enable
physical access to ore starting on level 525m -Budget for 2014 for
underground development and equipment purchases is $12
million.
Sonora Project
Targets
- Ermitaño Property - initial mapping, sampling and exploration
drilling of targets - Budget for 2014 is $550,000.
La Joya Project
Targets
- Complete evaluation of certain technical aspects of the project
to Pre Feasibility Study level.
- Complete a core drilling program of approximately 20 holes for
in-fill drilling of preliminary pit-constrained resources
(Preliminary Economic Assessment level) with subsequent
metallurgical work. Budget for 2014 is $1 million.
- Complete staged payments of $1.8 million under the La Joya
agreements to acquire 100% of the 12 mineral concessions under
option.
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, President and Chief Operating Officer for SilverCrest Mines
Inc., who has reviewed and approved its contents.
SilverCrest Mines Inc.
(TSX:SVL)(NYSEMKT: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, México. The mine
is a high‐grade, epithermal silver and gold producer, with an
estimated life of mine of 8 years and operating cash costs of $11
per ounce of silver equivalent (55:1 Ag:Au) for the open pit heap
leach and underground mine. SilverCrest anticipates that the new
3,000 tonnes per day conventional mill facility at the Santa Elena
Mine should recover an average annual rate of 1.5 million ounces of
silver and 32,800 ounces of gold over the current reserve. Major
expansion and construction of the 3,000 tonnes per day conventional
mill facility is nearing completion and is expected to
significantly increase metals production at the Santa Elena Mine
(open pit and underground) in 2014 and beyond. Exploration programs
continue to make new discoveries at Santa Elena and also have
rapidly advanced the definition of a large polymetallic deposit at
the La Joya property in Durango State, Mexico.
CAUTIONARY NOTE REGARDING
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.
CAUTIONARY NOTE REGARDING
NON-IFRS PERFORMANCE MEASURES
This news release includes
certain terms or performance measures commonly used in the mining
industry that are not defined under International Financial
Reporting Standards ("IFRS"), "Cash cost per silver equivalent
ounce sold" "All-in sustaining cash cost per silver equivalent
ounce sold", "Cash flows from operations before changes in working
capital items" and "Adjusted earnings per share". The Company
believes that, in addition to conventional measures prepared in
accordance with IFRS, certain investors use this information to
evaluate SilverCrest's performance and its ability to generate cash
flow. The data presented is intended to provide additional
information and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. Please refer to the Company's MD&A for the year ended
December 31, 2013, for a reconciliation of these measure to
reported IFRS results.
N. Eric Fier, President & COO
SILVERCREST MINES INC.
Neither TSX
Exchange nor its Regulation Services Provider (as defined in the
policies of the TSX Exchange) accepts responsibility for the
adequacy or accuracy of this release.
SilverCrest Mines Inc.Fred Cooper(604) 694-1730 ext. 108Toll
Free: 1-866-691-1730(604)
694-1761info@silvercrestmines.comwww.silvercrestmines.com
(AMEX:SVLC)
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