TSX.V: SCZ
FSE: 1SZ
VANCOUVER, May 31, 2018 /CNW/ - Santacruz Silver Mining
Ltd. (TSX.V:SCZ) (the "Company" or "Santacruz") reports on the
operating and financial results from the Veta Grande Project in
Zacatecas, Mexico and the Rosario
Project in San Luis Potosi, Mexico
and for the first quarter of 2018. The full version of the
financial statements and accompanying management's discussion and
analysis can be viewed on the Company's website at
www.santacruzsilver.com or on SEDAR at www.sedar.com. All
amounts are in thousands of US dollars unless otherwise
indicated.
"As previously reported, in the first quarter management
focussed on mine development at Veta
Grande in order to put the framework in place for achieving
targeted production during the third quarter of this year and
beyond," stated Arturo Préstamo, President and Chief Executive
Officer of Santacruz. "Although this decision will benefit the
Company going forward the first quarter financial and operational
results were negatively impacted as the result was feeding the
Veta Grande mill with low grade,
oxide material. Similarly, ongoing development at the
Membrillo Prospect resulted in a lower grade of millfeed to the
Rosario mill." He continued, "Importantly, the gross margin
realized from the mining services contract with Carrizal largely offset the mining operations
loss during the quarter."
Selected operating and financial information for the three-month
periods ended March 31, 2018,
December 31, 2017 and March 31, 2017 is presented below:
|
2018
Q1
|
2017
Q4
|
2017
Q1
|
Financial
|
|
|
|
Revenue – Mining
Operations
|
753
|
1,292
|
2,085
|
Revenue – Mining
Services
|
2,413
|
3,580
|
-
|
Gross Loss
(4)
|
(117)
|
(451)
|
(1,059)
|
Impairment
|
-
|
(10,445)
|
-
|
Net Income
(Loss)
|
(806)
|
(10,012))
|
1,490
|
Net Income (Loss) Per
Share – Basic ($/share)
|
0.00
|
(0.06)
|
0.01
|
Adjusted EBITDA
(4)
|
(209)
|
(1,435)
|
(848)
|
Operating
|
|
|
|
Material Processed
(tonnes milled)
|
48,068
|
30,974
|
45,474
|
Silver Equivalent
Produced (ounces) (1)
|
154,175
|
139,670
|
223,968
|
Silver Equivalent
Sold (payable ounces) (2)
|
59,648
|
94,204
|
163,457
|
Production Cost per
Tonne (3) ($/t)
|
52.97
|
86.49
|
54.93
|
Cash Cost per Silver
Equivalent ($/oz.) (3)
|
45.94
|
32.38
|
19.55
|
All-in Sustaining
Cost per Silver Equivalent ($/oz.) (3)
|
55.84
|
38.53
|
24.56
|
Average Realized
Silver Price per Ounce ($/oz.) (2) (5)
|
16.78
|
16.73
|
17.31
|
|
|
(1)
|
Silver equivalent
ounces produced in 2018 have been calculated using prices of
US$17.00/oz., US$1,295/oz., US$1.00/lb. and US$1.35/lb. for silver,
gold, lead and zinc respectively applied to the metal content of
the lead and zinc concentrates produced by the Company. Silver
equivalent ounces produced in 2017 have been calculated using
prices of US$16.00/oz., US$1,150/oz., US$1.00/lb. and US$1.15/lb.
for silver, gold, lead and zinc respectively applied to the metal
content of the lead and zinc concentrates produced by the
Company.
|
(2)
|
Silver equivalent
sold ounces have been calculated using the realized silver prices
stated in the table above, applied to the payable metal content of
the lead and zinc concentrates sold by the Company.
|
(3)
|
The Company reports
non-IFRS measures which include Production Cost per Tonne, Cash
Cost per Silver Equivalent, All-in Sustaining Cost per Silver
Equivalent and Average Realized Silver Price per Ounce. These
measures are widely used in the mining industry as a benchmark for
performance, but do not have a standardized meaning and may differ
from methods used by other companies with similar
descriptions.
|
(4)
|
The Company reports
additional non-IFRS measures which include Gross Profit (Loss) and
Adjusted EBITDA. These additional financial disclosure
measures are intended to provide additional information.
|
(5)
|
Average realized
silver price per ounce is prior to all treatment, smelting and
refining charges.
|
Financial Results
The Company realized an average silver price of $16.78 per ounce during Q1 2018 which is largely
unchanged from Q4 2017 and a 3% decrease as compared to Q1
2017.
The Company recorded a net loss of $806 in Q1 2018 compared to a net loss of
$10,012 in Q4 2017 and net income of
$1,490 in Q1 2017. The Q1 2017
net income arose primarily from a non-cash change in fair value of
derivative liabilities of $3,308 that
was recorded to other finance income. The Q4 2017 net loss
arose largely from an impairment charge of $10,445 that was recorded against the Rosario
Project.
Revenues in Q1 2018 of $3,166
include mining operations of $753 (Q1
2017 - $2,085; Q4 2017 - $1,292) and mining services of $2,413 (Q1 2017 - $nil; Q4 2017 - $3,580). Mining operations revenues in Q1
2018 decreased as a result of management's decision to focus on
mine development at both the Veta
Grande and Rosario Projects leading to lower grade
mineralized material being sent for processing.
The Company recorded a gross loss from operations of
$117 during Q1 2018 (Q1 2017 – loss
of $1,059; Q4 2017 – loss of
$451). The losses recorded in
Q1 2018 and Q4 2017 reflect the combined results of the Company's
mining operations and mining services activities. During
these periods the mining operations resulted in gross losses of
$2,129 and $1,474 for Q1 2018 and Q4 2017 respectively while
mining services resulted in gross profit of $2,012 and $856 for
the same periods.
Operational Results and Costs
Cash cost per ounce for the quarter was $45.94 per payable ounce of silver sold, an
increase of 135% from $19.55 per
ounce in Q1 2017 and an increase of 42% from $32.38 per ounce per ounce in Q4 2017. Cash cost
per ounce was higher primarily due to lower head grades in the
quarter arising from management's decision to focus on mine
development at both the Veta
Grande and Rosario Projects leading to lower grade
mineralized material being sent for processing. Cash costs at
both projects are expected to decrease in Q3 2018 as higher grade
material will be available for mining on a consistent basis at that
time and production throughput is also expected to increase.
All-in Sustaining Cost per ounce in the first quarter was
$55.84 per payable ounce of silver
sold, an increase of 127% from $24.56
per ounce in Q1 2017 and an increase of 45% from $38.53 per ounce per ounce in Q4 2017. The
increases occurred for the same reasons as those relating to the
cash cost per ounce increases referenced above.
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company with two producing
silver projects (Veta Grande Project and Rosario Project) and two
exploration properties (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, that the Company's financial condition and
development plans do not change as a result of unforeseen events,
that 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.
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content:http://www.prnewswire.com/news-releases/santacruz-silver-reports-first-quarter-2018-financial-results-300657050.html
SOURCE Santacruz Silver Mining Ltd.