SilverCrest Reports Second Quarter 2023 Results and Guidance for H2, 2023
- Strong Q2, 2023 financial results with $62.0 million revenue, $38.3 million mine operating income, and $23.7 million net income
- Debt-free company with $59.0 million in treasury assets
- Guidance for H2, 2023 includes selling 4.8 to 5.2 million silver equivalent ounces and maintaining low cash costs
- None.
TSX: SIL | NYSE American: SILV
N. Eric Fier, CEO, commented, "Las Chispas continued to deliver strong operational performance in the quarter with an increase in recovered metal, mine operating income, and net free cash flow2 from Q1, 2023. The announcement of our Updated Technical Report, subsequent to quarter end, was an important milestone for the Company and confirms the high-quality nature of the Las Chispas Operation with lowest quartile mine level AISC over an eight-year mine life. The results from Q2, 2023 confirm the quality of the operation with
Q2, 2023 Financial Highlights
- Sold a total of 13,400 ounces ("oz") of gold and 1.45 million oz of silver at average realized prices2 of
per oz gold and$1,991 per oz silver.$24.36 - Revenue of
and cost of sales of$62.0 million , resulting in mine operating income of$23.7 million , which represents a$38.3 million 62% operating margin. - Income of
or$23.7 million per share, inclusive of an$0.16 ($8.6 million per share) unrealized foreign currency loss.$0.06 - Net free cash flow3 of
or$43.7 million per share, supported by the net receipt of value added taxes and deferral of accounts payable and taxes.$0.30 - Increased cash balance by
and bullion holdings by$7.6 million during the quarter, after, sustaining capital at Las Chispas of$3.6 million and retiring$10.1 million of debt.$25.0 million - Cash flow from operating activities before changes in non-cash working capital items of
or$47.5 million per share.$0.32 - Cash costs2 of
per oz silver equivalent3 ("AgEq") sold and all-in sustaining cost ("AISC")2 of$7.39 per oz AgEq sold based on accelerated spend towards exploration and for sustaining capital to create operational flexibility.$12.70 - Ended the quarter debt free with treasury assets2 totaling
(cash of$59.0 million and gold and silver bullion of$53.4 million ). Access to an undrawn$5.6 million revolving credit facility remains.$70.0 million
Q2, 2023 Operating Highlights
- Recovered 16,500 ounces of gold and 1.53 million ounces of silver, or 2.84 million AgEq ounces. Recovered ounces were higher than sold ounces during the quarter, resulting in an increase in work in process and finished goods inventory of approximately 0.3 million payable AgEq ounces.
- Underground production mining rates averaged 818 tonnes per day ("tpd") during Q2, 2023, an increase of
16% compared to Q1, 2023 (707 tpd) and ahead of H1, 2023 expectations of 650 to 700 tpd. The Q2, 2023 rate aligns with Report expectations. - Daily development rates continued to increase in Q2, 2023 averaging 37.8 metres per day ("mpd") (Q1, 2023 - 31.5 mpd), including 33.4 mpd of lateral development, a level which is expected to increase slightly in H2, 2023.
- Daily processing plant throughput averaged 1,186 tpd, a slight increase from Q1, 2023 rate of 1,160 tpd. Processed grades increased from Q1, 2023, averaging 4.84 grams per tonne ("gpt") gold (Q1, 2023 - 4.06 gpt) and 449 gpt silver (Q1, 2023 - 419 gpt).
- Metallurgical recoveries improved over Q1, 2023 with an average gold recovery of
98.4% (Q1, 2023 -97.5% ) and average silver recovery of97.9% (Q1, 2023 -91.9% ). - Mining contract discussions paused in Q2, 2023 and will resume in earnest now that necessary details outlined in the Report are available. It is expected that these negotiations will be finalized in H2, 2023.
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1 Please refer to new release titled SilverCrest Announces Results of Updated Independent Technical Report dated July 31, 2023 and available on the Company's website. The Report will be filed on SEDAR+ within 45 days of July 31, 2023. |
2 Average realized prices, net free cash flow, net cash, treasury assets, cash costs and cash costs per AgEq ounce sold, AISC, and AISC per ounce sold are non-IFRS financial measures. Non-IFRS financial measures are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other companies. Please refer to the "NON-IFRS FINANCIAL MEASURES" section of this news release for additional information. |
3 Silver equivalent ("AgEq") ratio used in this news release of 79.51:1 was calculated using metal prices of |
Q2, 2023 Financial and Operational Highlights
Unit | Q2, 2023 | Q1, 2023 | H1, 2023 | ||
Revenue | $ millions | 62.0 | 58.0 | 120.0 | |
Cost of sales | $ millions | (23.7) | (22.4) | (46.1) | |
Mine operating income | $ millions | 38.3 | 35.6 | 73.9 | |
Income for the period | $ millions | 23.7 | 27.2 | 50.9 | |
Income per share – basic | $/share | 0.16 | 0.18 | 0.35 | |
Net free cash flow (1)(5) | $ millions | 43.7 | 21.8 | 65.5 | |
Cash costs (1)(5) | $/oz AgEq sold | 7.39 | 6.53 | 6.96 | |
AISC (1)(5) | $/oz AgEq sold | 12.70 | 10.94 | 11.82 | |
Unit | June 30, 2023 | March 31, 2023 | |||
Cash and cash equivalents | $ millions | 53.4 | 45.8 | ||
Bullion | $ millions | 5.6 | 2.0 | ||
Treasury assets (1) | $ millions | 59.0 | 47.8 | ||
Credit Facility Debt | $ millions | - | (25.0) | ||
Net cash | $ millions | 53.4 | 21.0 | ||
Unit | Q2, 2023 | Q1, 2023 | H1, 2023 | ||
Ore mined | tonnes | 74,400 | 63,600 | 138,000 | |
Ore milled (2) | tonnes | 107,900 | 104,400 | 212,300 | |
Average daily mill throughput | tpd | 1,186 | 1,160 | 1,173 | |
Gold (Au) | |||||
Average processed grade | gpt | 4.84 | 4.06 | 4.46 | |
Process Recovery | % | 98.4 | 97.5 | 98.0 | |
Recovered | oz | 16,500 | 13,300 | 29,800 | |
Sold | oz | 13,400 | 14,200 | 27,600 | |
Average realized price | $/oz | 1,991 | 1,879 | 1,933 | |
Silver (Ag) | |||||
Average processed grade | gpt | 449 | 419 | 434 | |
Process Recovery | % | 97.9 | 91.9 | 95.1 | |
Recovered | million oz | 1.53 | 1.29 | 2.82 | |
Sold | million oz | 1.45 | 1.36 | 2.81 | |
Average realized price | $/oz | 24.36 | 23.00 | 23.70 | |
Silver equivalent (AgEq) (3) | |||||
Recovered | million oz | 2.84 | 2.35 | 5.19 |
(1) | Non-IFRS measures. Please refer to the "NON-IFRS FINANCIAL MEASURES" section of this news release for additional information. |
(2) | Ore milled includes material from stockpiles and ore mined. |
(3) | Silver equivalent ("AgEq") ratio used in this news release of 79.51:1 was calculated using metal prices of |
(4) | As Q1, 2023 was the first full quarter of production at Las Chispas, there is no 2022 quarter end financial and operational information available for comparison. |
(5) | Comparative figures for Q1, 2023 have been updated to conform to the presentation format and calculation of costs adopted in Q2, 2023. This change was made to better align cash costs and AISC at the mine level with the format presented in the Updated Technical Report. |
Guidance Highlights
SilverCrest has set its H2, 2023 and 2023 guidance as follows:
Guidance Metric | Unit | H2, 2023 | 2023 |
AgEq Ounces | million oz sold | 4.8 to 5.2 | 9.8 to 10.2 |
Cash Costs | $/oz AgEq sold | 7.00 to 8.50 | 7.50 to 8.50 |
AISC – Mine Level | $/oz AgEq sold | 11.75 to 13.50 | 10.75 to 11.75 |
AISC | $/oz AgEq sold | 13.75 to 15.50 | 12.75 to 13.75 |
Notes: | |
1. | All costs based on Mexico Peso to US dollar exchange ratio of 20:1. During Q2, 2023 the Mexican peso to US dollar exchange ratio averaged 17.7:1. |
2. | Cash costs and AISC are Non-IFRS measures. There are some slight differences in the way that Cash Costs and AISC were calculated in the Report compared to the Company's definitions. Please refer to the "NON-IFRS FINANCIAL MEASURES" section of this news release for additional information. |
3. | AISC is based on World Gold Council definition, includes corporate level costs of |
4. | The AgEq in the table above used Ag:Au ratio of 79.51:1. If an Ag:Au ratio of 86.9:1 was applied to the table above, then AISC per AgEq ounce guidance would be reduced by |
Cash costs and AISC are expected to increase in H2, 2023 as the weighted average cost of material sourced from the stockpile increases and due to higher sustaining capital costs. Sustaining capital is expected to increase due to more underground development, including ventilation infrastructure and the establishment of mobile maintenance facilities. The Company plans to spend approximately
In conjunction with the Report, SilverCrest announced a
In Q2, 2023 mining rates averaged 818 tpd, an increase from Q1, 2023 rates of 707 tpd and
During Q2, 2023, the Las Chispas processing plant performed well with throughput averaging 1,186 tpd. Gold and silver recoveries increased from Q1, 2023 (
Processed gold and silver grades increased from Q1, 2023 levels as the percentage of lower grade historic stockpile feed was reduced and higher grades in stockpile delivered to the plant. During the quarter, processed gold grades averaged 4.84 gpt (4.06 gpt in Q1, 2023) and silver grades averaged 449 gpt (419 gpt in Q1, 2023). During Q2, 2023, the grade to the plant was increased above plan to prepare for the potential of a reduction of process plant operating time in Q3, 2023 due to planned maintenance and the potential for seasonal stormy weather impacting national grid power availability.
An estimated 16,500 oz of gold and 1.53 million oz of silver, or 2.84 million silver equivalent oz were recovered in the quarter.
As outlined in the Report, the Company continues to benefit from strategic stockpiles used to supplement processing plant feed as the mine is gradually developed, and tonnage ramped-up.
The Company continued to strengthen its liquidity during Q2, 2023. With cash flow generated from its Las Chispas Operation during the quarter, the Company continued to build its treasury assets balance while extinguishing its debt balance and increasing capital expenditure, especially in underground development. As of June 30, 2023, the Company had a treasury assets balance of
During Q2, 2023, the Company sold a total of 13,400 oz of gold and 1.45 million oz of silver, at average realized prices of
In the second quarter, total cost of sales was
During the quarter, cash costs averaged
Income for Q2, 2023 was
During Q2, 2023, capital expenditure at Las Chispas increased over Q1, 2023 by
In May 2023, the Company was recognized with the 2023 Empresa Socialmente Responsable (ESR) Socially Responsible Company Distinction by the Mexican Center for Philanthropy (CEMEFI) for 'the areas of Quality of Life in the Company, Ethics and Corporate Governance, Links with the Community and Care and Preservation of the Environment'.
On June 14, 2023 SilverCrest delivered its inaugural ESG report for the year ended 2022, which is available on the Company's website.
Subsequent to the end of the quarter, the Company commenced the second of its five-year
This press release should be read in conjunction with SilverCrest's unaudited interim consolidated financial statements and management's discussion and analysis for the six months ended June 30, 2023 which are available on the Company's website at www.silvercrestmetals.com, and under the Company's profiles on SEDAR+ (www.sedarplus.com) and EDGAR (www.sec.gov).
A conference call to discuss the Company's Q2, 2023 financial results will be held tomorrow, Thursday August 10, 2023 at 8:00 a.m. PT / 11:00 a.m. ET. To participate in the conference call, please dial the numbers below.
Date & Time: | Thursday August 10, 2023 at 11:00 a.m. ET / 8:00 a.m. PT |
Telephone: | |
North America Toll Free: 1-888-396-8049 | |
Conference ID: 44514275 | |
Webcast: | https://silvercrestmetals.com/investors/presentations/ |
The Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects for this news release is N. Eric Fier, CPG, P.Eng, and CEO for SilverCrest, who has reviewed and approved its contents.
SilverCrest is a Canadian precious metals producer headquartered in
This news release contains "forward-looking statements" and "forward-looking information" (collectively "forward-looking statements") within the meaning of applicable Canadian and
N. Eric Fier, CPG, P.Eng
Chief Executive Officer
SilverCrest Metals Inc.
SilverCrest uses certain non-IFRS performance measures in this news release. Non-IFRS financial measures do not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other issuers. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, management and certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it 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.
Non-IFRS financial measures - Average realized gold and silver price
Average realized gold and silver price per ounce is calculated by dividing the Company's gross revenue from gold or silver sales for the relevant period by the gold or silver ounces sold, respectively. The Company believes the measure is useful in understanding the metal prices realized by the Company throughout the period. Average realized price per ounce sold is a common performance measure that does not have any standardized meaning. The most directly comparable measure prepared in accordance with IFRS is revenue from gold and silver sales.
Q2, 2032 | Q1, 2023 | H1, 2023 | ||
( | ||||
Revenues from financial statements | $ 61,999 | $ 57,983 | $ 119,982 | |
Ag sales | (35,319) | (31,307) | (66,626) | |
Au sales | A | 26,680 | 26,676 | 53,356 |
Au oz sold during the period | B | 13,400 | 14,200 | 27,600 |
Average realized Au price per oz sold | A/B | $ 1,991 | $ 1,879 | $ 1,933 |
Revenues from financial statements | 61,999 | 57,983 | 119,982 | |
Au sales | (26,680) | (26,676) | (53,356) | |
Ag sales | A | 35,319 | 31,307 | 66,626 |
Ag oz sold during the period | B | 1,450,000 | 1,361,000 | 2,811,000 |
Average realized Ag price per oz sold | A/B | $ 24.36 | $ 23.00 | $ 23.70 |
Non-IFRS financial measure - Net free cash flow
Net free cash flow is not meant to be a substitute for the cash flow information presented in accordance with IFRS. SilverCrest calculates net free cash flow by deducting expenditures on mineral property, plant, and equipment from net cash provided by operating activities. Non-sustaining and growth capital activities are excluded. Net free cash flow is divided by the basic weighted average shares outstanding to get the net free cash flow per basic share. The Company believes that this measure provides valuable assistance to investors and analysts in evaluating the Company's ability to generate cash flow after capital investments and build the cash resources of the Company. The most directly comparable measure prepared in accordance with IFRS is net cash provided by operating activities less net cash used in investing activities. This differs from the Company's calculation as net cash used in investing activities is used in place of expenditures on mineral property, plant, and equipment. Net cash used in investing activities would include all cash inflows and outflows related to investing activities as per the consolidated statement of cash flows.
Net free cash flow | Q2, 2023 | Q1, 2023 | H1, 2023 | |
Cash flow from operating activities | 53,808 | 26,973 | 80,781 | |
Sustaining capital expenditures | (10,103) | (5,181) | (15,284) | |
Net free cash flow at mine level | A | 43,705 | 21,792 | 65,497 |
Weighted average shares outstanding - basic | B | 147,231 | 147,200 | 147,216 |
Net free cash flow - basic per share | A/B | 0.30 | 0.15 | 0.44 |
Sustaining capital expenditures ( | Q2, 2023 | Q1, 2023(1) | H1, 2023 | |
Expenditures on mineral property, plant, and equipment | (12,919) | (7,930) | (20,849) | |
Payment of lease liabilities | (28) | (43) | (71) | |
Non-sustaining and growth capital activities | 2,844 | 2,792 | 5,636 | |
Sustaining capital expenditures | (10,103) | (5,181) | (15,284) |
(1) | Q1, 2023 sustaining capital expenditures have been updated to conform to calculation of costs adopted in Q2, 2023, which reallocated exploration costs from sustaining to non-sustaining and growth capital activities. |
Non-IFRS financial measure - Net cash
SilverCrest calculates net cash by deducting debt from cash and cash equivalents as reported in the consolidated statements of financial position. The Company believes that in addition to conventional measures prepared in accordance with IFRS, net cash is useful to evaluate its liquidity and capital resources.
Net Cash | June 30, 2023 | March 31, 2023 | |
Cash and cash equivalents | 53,413 | 45,765 | |
Debt | - | (24,811) | |
Net cash | 53,413 | 20,954 |
Non-IFRS financial measure – Treasury assets
SilverCrest calculates treasury assets as cash and cash equivalents plus bullion as reported in the consolidated statements of financial position. The Company believes that in addition to conventional measures prepared in accordance with IFRS, treasury assets is useful to evaluate its liquidity and capital resources.
Treasury assets | June 30, 2023 | March 31, 2023 | |
Cash and cash equivalents | 53,413 | 45,765 | |
Bullion | 5,634 | 1,985 | |
Treasury Assets | 59,047 | 47,750 |
Non-IFRS financial measure - Cash costs and cash costs per silver equivalent ounce sold
The Company uses cash costs per ounce of precious metals sold to monitor its operating performance internally. The most directly comparable measure prepared in accordance with IFRS is cost of sales. The Company believes this measure provides investors and analysts with useful information about its underlying cash costs of operations. The Company also believes it is a relevant metric used to understand its operating profitability and ability to generate cash flow. Cash costs are measures developed by precious metals companies in an effort to provide a comparable standard; however, there can be no assurance that the Company's reporting of these non-IFRS financial measures are similar to those reported by other mining companies. They are widely reported in the silver mining industry as a benchmark for performance, but do not have a standardized meaning and are disclosed in addition to IFRS financial measures. Cash costs include production costs, refinery and transportation costs and extraordinary mining duty. Cash costs excludes non-cash depreciation and depletion and site share-based compensation.
Cash costs per silver equivalent ounce sold is calculated by dividing cash costs by the silver equivalent ounces sold.
Non-IFRS financial measure - AISC and AISC per silver equivalent ounce sold
The Company defines AISC as the sum of total cash costs (as defined above); general and administrative expenses; share-based compensation; reclamation and closure provision depletion and accretion related to current operations; sustaining capital expenditures relating to current operations, including underground mine development and exploration and evaluation costs; and payments for leases. Corporate and allocated general and administrative expenses do not include non-cash depreciation. As this measure seeks to reflect the full cost of silver equivalent production from current operations, growth capital is excluded. Certain other cash expenditures, including tax payments and financing charges are also excluded. There are some slight differences in the way that Cash Costs and AISC were calculated in the Report compared to the Company's definitions as the Report looks at the standalone operation. The Report includes
( | Q2, 2023 | Q1, 2023(2) | H1, 2023 |
Cost of sales from financial statements | $ 23,706 | $ 22,377 | $ 46,083 |
Less: depreciation and depletion | (4,990) | (4,045) | (9,035) |
Less: changes in inventories | 877 | (906) | (29) |
Less: corporate salaries and other expenses in cost of sales | (1,003) | (1,163) | (2,166) |
Total cash costs | 18,590 | 16,263 | 34,853 |
Add: sustaining capital expenditures | 10,103 | 5,181 | 15,284 |
Total all-in sustaining costs at the mine level | $ 28,693 | $ 21,444 | $ 50,137 |
Add: reclamation and closure provision - depletion and accretion | 225 | 199 | 424 |
Add: changes in inventories | (877) | 906 | 29 |
Add: corporate general and administrative expenses (including share-based compensation) | 2,894 | 3,520 | 6,414 |
Add: corporate salaries and other expenses in cost of sales | 1,003 | 1,163 | 2,166 |
Total all-in sustaining costs | $ 31,938 | $ 27,232 | $ 59,170 |
AgEq koz sold (79.51:1)(1) | 2,515 | 2,490 | 5,005 |
Total cash costs per oz sold | $ 7.39 | $ 6.53 | $ 6.96 |
All-in sustaining costs per oz sold at the mine level | $ 11.41 | $ 8.61 | $ 10.02 |
All-in sustaining costs per oz sold | $ 12.70 | $ 10.94 | $ 11.82 |
(1) | For consistency with the comparative period, the AgEq ratio reported during Q1, 2023 was changed from 86.9:1 to 79.51:1, resulting in a change from 2,595 koz AgEq sold reported in Q1, 2023 to 2,490 koz AgEq sold. |
(2) | Previously reported as AISC at the project level and at the corporate level for Q1, 2023 as |
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SOURCE SilverCrest Metals Inc.
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