TSX.V: SCZ
FSE: 1SZ
VANCOUVER, March 5, 2018 /CNW/ - Santacruz Silver
Mining Ltd. (TSX.V:SCZ) (the "Company" or "Santacruz")
reports its operating results from the Veta Grande Project in
Zacatecas, Mexico and Rosario
Project in Charcas, San Luis Potosi,
Mexico for the fourth quarter ("Q4") and year ended
December 31, 2017 and provides an
operations update.
The Company produced a total of 865,458 silver equivalent ounces
in fiscal 2017 (2016 - 970,332) including fourth quarter production
of 139,670 silver equivalent ounces (2016 - 242,048). The
decreased production is a result of a number of factors including a
delayed production start at the Membrillo Prospect, lower than
expected head grades from the previously mined mineralized material
("chorros") at the Veta Grande Project and from a temporary
suspension of operations at the Veta Grande Project in November 2017 (see press release dated
November 22, 2017). Mining operations
were further challenged by a deficiency of working capital.
Arturo Prestamo, Santacruz's
President and CEO stated "In 2017 Santacruz made several positive
steps towards solidifying its operations base including the
retirement of the senior JMET debt facility, the negotiation of the
outright acquisition of the Veta Grande Project, the appointment of
Carlos Silva as COO, and optioning
20% of the Company's Zacatecas
mineral portfolio to Carrizal Mining, S.A. de C.V." Mr.
Prestamo continued "Further, as a first step to address the
Company's current working capital needs Santacruz has entered into
a services agreement with Carrizal Mining to provide to it certain
mining related services that will generate approximately
US$1.1 million of monthly cash flow
to Santacruz."
Project Updates
Veta Grande Project
Two important initiatives are currently ongoing at the Veta
Grande Project. The first initiative is the expansion of the
Veta Grande mill capacity to 750
tpd which is well advanced. Commissioning of this expansion is
expected to start in late March. The second initiative is the
conversion of the source of mineralized millfeed to the
Veta Grande mill from the chorros
to in situ vein material from the Veta
Grande and Armados veins. In connection with this
matter the first phase of a surface drilling campaign consisting of
6,000 metres is underway on the Veta
Grande vein and a 3,000-metre underground drill program on
the Armados vein is scheduled to commence within 10 days. The
mill expansion and drilling campaigns are being funded by Carrizal
Mining pursuant to the terms of its 20% earn-in on the Veta Grande mineral portfolio.
Rosario Project
The Company recently has recently taken the decision to
consolidate all of its Rosario Project mining operations to the
Membrillo Prospect. Mine development has now reached Level 2
and mine production is increasing. Once the mine operations
at the Membrillo Prospect achieve target amounts the Company will
recommence mining operations at the Cinco Estrellas Property.
CONSOLIDATED PRODUCTION RESULTS – 2017 Q4 AND 2017
ANNUAL
|
2017
Q4
|
2016
Q4
|
2017
Yr
|
2016
Yr1
|
Material Processed
(tonnes milled)
|
30,975
|
46,587
|
181,077
|
121,804
|
Silver eqv. ounce
production
|
139,670
|
242,048
|
865,458
|
970,332
|
Silver production
(ounces)
|
44,316
|
100,199
|
313,946
|
486,136
|
Gold production
(ounces)
|
239
|
251
|
1,431
|
569
|
Lead production
(tonnes)
|
94
|
348
|
623
|
991
|
Zinc production
(tonnes)
|
412
|
768
|
2,292
|
3,039
|
Average Head Grade
(g/t Ag Eqv.)
|
194
|
206
|
161
|
288
|
2017 Ag Eq was
calculated using metal prices of: Ag $16.00/oz, Au $1,150/oz, Pb
$1.00/lb and Zn $1.15/lb.
|
2016 Ag Eq was
calculated using metal prices of: Ag $14.50/oz, Au $1,100/oz, Pb
$0.76/lb and Zn $0.71/lb.
|
1
|
The Veta Grande
Project commenced commercial production October 1, 2016 and as such
the 2016 annual production figures
do not include a full year's production from this
project.
|
VETA GRANDE PROJECT
PRODUCTION RESULTS – 2017 Q4 AND 2017 ANNUAL
|
2017
Q4
|
2016
Q4
|
2017
Yr
|
2016
Yr1
|
Material Processed
(tonnes milled)
|
17,657
|
28,562
|
102,111
|
28,562
|
Silver eqv. ounce
production
|
64,987
|
106,519
|
423,130
|
106,519
|
Silver production
(ounces)
|
25,665
|
29,843
|
201,284
|
29,843
|
Silver head grade
(g/t)
|
78
|
56
|
100
|
56
|
Silver recovery
(%)
|
58
|
58
|
61
|
58
|
Gold production
(ounces)
|
53
|
115
|
424
|
115
|
Lead production
(tonnes)
|
70
|
232
|
466
|
232
|
Zinc production
(tonnes)
|
163
|
382
|
803
|
382
|
Average Head Grade
(g/t Ag Eqv.)
|
183
|
170
|
127
|
170
|
2017 Ag Eq was
calculated using metal prices of: Ag $16.00/oz, Au $1,150/oz, Pb
$1.00/lb and Zn $1.15/lb.
|
2016 Ag Eq was
calculated using metal prices of: Ag $14.50/oz, Au $1,100/oz, Pb
$0.76/lb and Zn $0.71/lb.
|
1
|
The Veta Grande
Project commenced commercial production October 1, 2016 and as such
the 2016 annual production figures
do not include a full year's production from this
project.
|
ROSARIO PROJECT PRODUCTION
RESULTS – 2017 Q4 AND 2017 ANNUAL
|
2017
Q4
|
2016
Q4
|
2017
Yr
|
2016
Yr
|
Material Processed
(tonnes milled)
|
13,317
|
18,025
|
78,964
|
93,242
|
Silver eqv. ounce
production
|
74,683
|
135,529
|
442,328
|
863,873
|
Silver production
(ounces)
|
18,652
|
70,356
|
112,662
|
456,293
|
Silver head grade
(g/t)
|
53
|
126
|
52
|
163
|
Silver recovery
(%)
|
82
|
96
|
85
|
94
|
Gold production
(ounces)
|
186
|
136
|
1,007
|
454
|
Lead production
(tonnes)
|
23
|
116
|
157
|
759
|
Zinc production
(tonnes)
|
249
|
386
|
1,489
|
2,657
|
Average Head Grade
(g/t Ag Eqv.)
|
209
|
263
|
205
|
324
|
2017
Ag Eq was calculated using metal prices
of: Ag $16.00/oz, Au $1,150/oz, Pb $1.00/lb and Zn
$1.15/lb.
|
2016
Ag Eq was calculated using metal prices
of: Ag $14.50/oz, Au $1,100/oz, Pb $0.76/lb and Zn
$0.71/lb.
|
Sampling and Laboratory
The reported head grades have been estimated from assay results
of samples collected from stockpiles of mined mineralized material.
The reported stope grades are of assay results of underground chip
samples collected across the vein and at an average interval of
three meters along the strike length of the vein. Blanks, standards
and duplicate control samples are not utilized in the sampling
procedure.
Samples collected from the Rosario and Veta Grande Projects are assayed
at the Rosario and Veta Grande laboratories, respectively. Both
laboratories are owned and operated by Santacruz and the facilities
are meant to serve the mining operations at the projects. The
Rosario and Veta Grande laboratories are not independent
of the Company and do not hold ISO certification. Samples are
prepared by drying, crushing, rifle splitting and pulverizing to
<75 microns passing 200-mesh. Samples are analyzed by 3-acid
digestion and Atomic Absorption Spectrometry. Gold and silver are
further analyzed by fire assay with gravametric finish.
Qualified Persons
The technical information included in this statement has been
reviewed and approved by Van Phu
Bui, P.Geo. of ARC Geoscience Group who is independent of
the Company and is a qualified person, pursuant to the meaning of
such terms in NI 43-101.
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company with two producing
silver projects (Rosario,
including the Cinco Estrellas property and Membrillo Prospect, and
Veta Grande) and two exploration
properties, the Minillas property
and Zacatecas properties. The
Company is managed by a technical team of professionals with proven
track records in developing, operating and discovering silver mines
in Mexico. Our corporate objective
is to become a mid-tier silver producer.
'signed'
Arturo Préstamo Elizondo,
President, Chief Executive Officer and Director
Neither the 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.
Forward looking information
Certain statements contained in this news release constitute
"forward-looking information" as such term is used in applicable
Canadian securities laws. Forward-looking information is based on
plans, expectations and estimates of management at the date the
information is provided and is subject to certain factors and
assumptions. In making the forward-looking statements included in
this news release, the Company has applied several material
assumptions, including, but not limited to, assumptions as to the
continuation of payments under the Agreement, the expansion of the
Vita Grande Project, the Company's financial condition and
development plans do not change as a result of unforeseen events,
third party mineralized material to be milled by the Company will
have properties consistent with management's expectations, that the
Company will receive all required regulatory approvals, and that
future metal prices and the demand and market outlook for metals
will remain stable or improve. Forward-looking information is
subject to a variety of risks and uncertainties and other factors
that could cause plans, estimates and actual results to vary
materially from those projected in such forward-looking
information. Factors that could cause the forward-looking
information in this news release to change or to be inaccurate
include, but are not limited to, the risk that any of the
assumptions referred to prove not to be valid or reliable, which
could result in lower revenue, higher cost, or lower production
levels; delays and/or cessation in planned work; changes in the
Company's financial condition and development plans; delays in
regulatory approval; risks associated with the interpretation of
data (including in respect of the third party mineralized material)
regarding the geology, grade and continuity of mineral deposits;
the possibility that results will not be consistent with the
Company's expectations, as well as the other risks and
uncertainties applicable to mineral exploration and development
activities and to the Company as set forth in the Company's
continuous disclosure filings filed under the Company's profile
at www.sedar.com. There can be no assurance that
any forward-looking information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader should not
place any undue reliance on forward-looking information or
statements. The Company undertakes no obligation to update
forward-looking information or statements, other than as required
by applicable law.
Rosario Project
The decisions to commence production at the Rosario Mine,
Cinco Estrellas Property and Membrillo Prospect were not based on a
feasibility study of mineral reserves demonstrating economic and
technical viability, but rather on a more preliminary estimate of
inferred mineral resources. Accordingly, there is increased
uncertainty and economic and technical risks of failure associated
with this production decision. Production and economic variables
may vary considerably, due to the absence of a complete and
detailed site analysis according to and in accordance with NI
43-101.
Veta Grande Project
The decision to commence production at Veta Grande Project
was not based on a feasibility study on mineral reserves
demonstrating economic and technical viability. Accordingly, there
is increased uncertainty and economic and technical risks of
failure associated with this production decision. Production and
economic variables may vary considerably due to the absence of a
complete and detailed site analysis according to and in accordance
with NI 43-101.
SOURCE SantaCruz Silver Mining Ltd.