VANCOUVER, BC March
24, 2014 SilverCrest Mines Inc. (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:
To view the entire press release please follow the link:
http://www.irw-press.com/dokumente/SilverCrest_240314_English.pdf
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 Companys 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
SilverCrests 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
Ermitao 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. (NYSE MKT: SVLC; TSX: SVL) is a Canadian
precious metals producer headquartered in Vancouver, BC. SilverCrests flagship
property is the 100%‐owned Santa Elena Mine, located 150 km northeast of
Hermosillo, near Banamichi in the State of Sonora, Mxico. 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
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.
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 SilverCrests 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
N. Eric Fier, President & COO
SILVERCREST MINES INC.
Contact: Fred Cooper
Telephone: (604) 694-1730 ext. 108
Fax: (604) 694-1761
Toll Free: 1-866-691-1730
Email: [email protected]
Website: www.silvercrestmines.com
Suite 501 – 570 Granville Street
Vancouver, BC Canada V6C 3P1
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 reléase.
