SilverCrest Announces Second Quarter
Earnings of $790,000
and Cash Flow from
Operations of $3.1M
VANCOUVER, B.C. August 30, 2011 � SilverCrest Mines Inc. (the �Company� or �SilverCrest�) is pleased to announce strong positive
cash flow, earnings and operating results in line with budgeted projections
for its first quarter of commercial production at its Santa Elena Mine in
Sonora, Mexico. This press release should be read in conjunction with
the Company�s Manangement Discussion &
Analysis, Condensed Consolidated Interim Financial Statements and Notes to
Financial Statements for the six month period ended June 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 June
30, 2011 is the first quarter SilverCrest has
reported production revenues and expenses.
Financial
Highlights
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Three months
ended
June 30, 2011
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Revenue
reported
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$8,556,261
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Mine
operating earnings(1)
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$5,705,087
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Comprehensive earnings before loss on non-cash
derivative instruments
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$4,296,517
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Comprehensive earnings
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$790,429
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Comprehensive Earnings per share
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$0.01
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|
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Cash flow from operations before changes in
working capital items
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$3,113,371
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Cash
and cash equivalents
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$33,320,876
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Cash operating cost per silver equivalent ounce
sold (2)
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$8.27
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|
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Operating
Highlights
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|
|
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Tonnes
of ore mined
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249,217
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Tonnes
of waste mined
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707,553
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Waste/Ore ratio
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2.84
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|
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Ounces of silver produced
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74,678
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Ounces of gold produced
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5,476
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Ounces of silver sold
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70,326
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Ounces of gold sold
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4,300
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(1) Mine operating earnings have not been adjusted for non cash
revenue which consists of $2,007,810 from
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derivative instruments and $322,725 from deferred revenue.
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(2) Silver equivalence was calculated using market spot rates of
$1,505.50 per gold ounce and $35.02 per
|
silver ounce at June 30, 2011.
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Highlights for the
Second Quarter Ended June 30, 2011
Second Quarter
Financial Highlights
Revenues reported from the Santa Elena Mine amounted to $8,556,261. Silver
sales were 70,325 ounces at an average realized price of $38.90. Gold
delivered into the Macquarie Bank Ltd. (�MBL�) Hedging Facility was 3,440
ounces at an average realized price of $926.50. Included in revenue
is a non cash amount of $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
Company also recorded gold sales of $623,705 related to the delivery of 860
gold ounces to Sandstorm Gold Ltd. (�Sandstorm�), which consists of
$300,979 of cash received and $322,725 from amortization of deferred
revenue.
Cost of sales amounted to $2,109,801 which is a cash operating cost of
$8.27 per silver equivalent ounce sold. Cash operating costs are consistent
with the Santa Elena Life of Mine budget projections for 2011.
Other net expense items amounted to $4,914,658 which primarily relates to
loss on derivative instruments of $3,506,089. 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. The derivative loss comprises $3,221,089 relating to the
incremental fair value of the MBL Hedging Facility and $285,000 relating to
the incremental fair value of the MBL European gold call option which
represents the difference between the average market spot price of gold for
the quarter and strike price of $926.50 per ounce for the Hedging Facility
and $1,000 per ounce for the European gold call option respectively.
Comprehensive earnings for the quarter were $790,429 or $.01 per share
compared to a comprehensive loss of $(8,892,761) or $(0.15) per share for
Q2 2010.
The Company made a loan repayment of $800,000 from Santa Elena production
revenues to MBL and subsequent to June 30, 2011, made further loan repayments of $2,000,000 from production
revenues. Loan obligations of $3.6 million remain for fiscal 2011.
The Company completed a prospectus financing for total gross proceeds of
CAD$30 million.Cash and cash equivalents were
$33.3 million at June 30, 2011 of which only $1.5 million is designated
cash.
Second Quarter
Operating Highlights
Approximately 249,000 tonnes of ore were mined,
crushed and delivered to the pad at the Santa Elena Mine. The high grade
ore (average grade of 1.91 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 in 2011. Crusher throughput
averaged 2,737 tonnes per day which is above the
design throughput capacity of 2,500 tpd.
Optimization of the various operating parameters of the crusher has been
completed in order to ensure a steady state of production at design
capacity.
During the quarter, 74,678 ounces of silver and 5,476 ounces of gold were
produced as dore, with a significant amount of
silver and gold still in solution for processing and recovery. The Company
sold 70,326 ounces of silver and 4,300 ounces of gold. The Company also
delivered 860 ounces of gold under its gold stream contract with Sandstorm,
and delivered 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.
No lost time accidents occurred. Since construction started in October 2009
there has been no lost time accidents with over
563,000 hours worked by June 30, 2011.
J. Scott Drever, President stated; �Achieving
commercial production in June was an important and exciting milestone for the
Company but more importantly we have been able to generate significant
positive cash flow and earnings early in the development of the Santa Elena
Mine. To date in 2011 the Company has generated metal sales of $13.4
million, of which $4.8 million was capitalized in the three months to March
31, 2011. By achieving a cash operating cost of $8.27 per ounce of silver
equivalent at this early stage we have met our initial expectations but we
will continue to optimize our operations so as to reduce this cost. With a
cash balance of $33.3 million and increasing operational cash flows we
should be able to achieve both our financial
and growth objectives.�.
Outlook for the
remainder of 2011
As part of the Company�s Expansion Plan to double production over the next
three years, an estimated 45 hole infill drill program comprising
approximately 5,000 metres is set to commence in
the third quarter at Cruz de Mayo, a satellite property of Santa Elena
Mine, to increase and upgrade resources to a Pre-Feasibility level.
Engineering and selection of contractors is underway for commencement of an
underground decline at the Santa Elena Mine in the fourth quarter which
upon completion, will provide access to further explore, potentially expand
and develop the current silver and gold resources below the planned
ultimate pit
The La Joya Project Phase 1, 26 diamond drill
hole program, comprising approximately 5,500 metres,
has just been completed. Work is underway to prepare an initial 43-101
compliant Technical Report with a resource
estimation. Based on success of Phase I, a Phase II, 10,000 metre drill program consisting of approximately 50
drill holes, is planned to start in the fourth quarter of 2011.
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, M�xico. The mine is a high-grade, 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.
�J. Scott Drever�
J. Scott Drever, President
SilverCrest Mines Inc.
For further information, please contact:
Fred Cooper
570 Granville Street, Suite 501
Vancouver, BC V6C 3P1
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.
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