TSX.V: SCZ
VANCOUVER, Dec. 2, 2014 /PRNewswire/ - Santacruz Silver
Mining Ltd. (TSX.V:SCZ) (the "Company" or "Santacruz")
is pleased to announce the financial and operating results for the
third quarter of 2014 ("Q3"). The full version of the
financial statements and accompanying management discussion and
analysis can be viewed on the Company's website at
www.santacruzsilver.com or on SEDAR at www.sedar.com. All
financial information is prepared in accordance with IFRS and all
dollar amounts are expressed in US dollars unless otherwise
indicated.
"The third quarter has seen continued improvements at the
Rosario Mine. Most importantly we have seen a significant increase
in our revenues while at the same time a continuous reduction in
our operating costs per silver equivalent ounce resulting in
positive cash flow of $464,000 at our
Rosario Mine during the quarter," said Arturo Préstamo, President
and CEO. "The cash cost per equivalent ounce of silver sold has
decreased more than 18% when compared to the second quarter of
2014, and we expect that this figure will decrease even further in
subsequent quarters as production keeps ramping up and efficiencies
are taking place. We have just started the commissioning of the
third ball mill and expect it to be running at specifications by
mid-December, taking Rosario´s milling capacity up to 450-500 tpd.
This will allow us to further reduce our costs going forward."
"In addition, and in light of current volatility in metal
prices, as announced on December 1,
2014, we have established a floor price for silver
production from the Rosario Mine through 2015 and 2016. We have
minimum floor prices of $17/oz for
all of 2015 and Q1 2016 and $16/oz
for the last three quarters of 2016. The financial
instruments establishing the floor prices allow us to fully
participate in any increase in the silver price. Our main objective
is to ensure the production and cost targets for Rosario that will allow us to keep building a
strong treasury with a view to advancing our properties as soon as
a more stable environment to do so prevails."
Third Quarter 2014 Financial Summary
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Highlights
(US$000's except per share amount)
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Q3
2014
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Q2
2014
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Q1
2014
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Q3 vs
Q2
%
change
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Revenue
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$3,167
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$2,302
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$1,932
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37.5
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Mine Operating Income
(Loss)(1)
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$26
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$(895)
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$(861)
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102.9
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Net
Loss(1)
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$1,054
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$1,579
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$1,575
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-33.2
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Basic Loss per
Share(1)
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$0.01
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$0.02
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$0.02
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-50%
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Working Capital at
period end
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$4,223
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$7,210
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$12,393
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-41.4
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(1)
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During the second quarter of 2014 the Company took
the decision to capitalize the expenditures incurred subsequent to
December 31, 2013 to develop the Main Access Ramp at Rosario.
Accordingly, $735,096 was capitalized to Plant and Equipment during
the second quarter. Included in this amount was $486,514 relating
to the first quarter of 2014. For the purposes of this comparison
the referenced 2014 first quarter and second quarter figures have
been adjusted accordingly to reflect this change.
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Third Quarter 2014 Mine Operations Summary
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Highlights
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Q3
2014
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Q2
2014
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Q1
2014
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Q3 vs
Q2
%
change
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Ore Processed (tonnes
milled)(1) (4)
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23,677
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22,612
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20,447
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4.7
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Silver Equivalent
Production (ounces)(2)
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192,400
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168,300
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160,600
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14.3
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Silver Equivalent
Sold (ounces)(3) (5)
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188,100
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148,800
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121,800
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26.4
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Cash Cost per Silver
Equivalent Sold ($/oz.)(4) (5)
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$18.13
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$22.17
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$25.04
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(18.2)
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Production Cost
($/tonne)(4) (5)
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$97.81
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$128.75
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$110.95
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(24.0)
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All-in Sustaining
Cost per Silver Equivalent Sold ($/oz.)(4)
(5)
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$23.68
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$29.70
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$35.49
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(20.3)
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Average Realized
Silver Price ($/oz.)(4)
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$19.55
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$19.76
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$20.55
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(1.1)
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(1)
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Ore Processed
includes 4,025 and 11,453 tonnes respectively in the second and
first quarter arising from third party ore purchased by the Company
and processed through the milling facility.
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(2)
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Silver equivalent
ounces produced for fiscal 2014 are calculated using prices of
US$20.00/oz., US$1,250/oz., US$0.96/lb. and US$90/lb. for
silver, gold, lead and zinc respectively, applied to the recovered
metal contained in the lead and zinc concentrates produced at the
Rosario Mine.
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(3)
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Silver equivalent
ounces sold in the third, second and first quarter of 2014 were
calculated using realized silver prices of US$19.55/oz, US$19.76/oz
and US$20.58/oz respectively, applied to the payable metal content
of the lead and zinc concentrates sold from the Rosario
Mine.
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(4)
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The Company reports
non-IFRS measures which include Cash Cost per Silver Equivalent,
Production Cost, All-in Sustaining Cost per Silver Equivalent and
Average Realized Silver Price. 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.
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(5)
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During the second
quarter of 2014 the Company took the decision to capitalize the
expenditures incurred subsequent to December 31, 2013 to develop
the Main Access Ramp. Accordingly, $735,096 was capitalized
to Plant and Equipment during the second quarter. Included in
this amount was $486,514 relating to the first quarter of
2014. For the purposes of this comparison the referenced 2014
first quarter and second quarter figures have been adjusted to
reflect this change.
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Operational Review
During the third quarter of 2014 the average mine production was
325 tpd, exiting the quarter at 380 tpd. The arrival in late
November of the new motor for the third ball mill and commencement
of commissioning now puts the operation on a stronger footing. This
will allow the milling facility capacity to increase to 450 tpd
before the end of December and with a planned installation of
additional flotation cells in early January the milling facility
capacity will increase to approximately 700 tpd. With the surface
stockpile of ore at Rosario at
over 12,000 tonnes the Company is well positioned to see continued
improvements in the Rosario Mine operations over the coming
quarters.
Qualified Person
All technical information which is included in this statement
has been reviewed and approved by Donald E.
Hulse P.E. of Gustavson Associates LLC. Mr. Hulse is
independent of the Company and a qualified person, pursuant to the
meaning of such terms in National Instrument 43-101 Standards of
Disclosure for Mineral Projects.
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company with a producing
mine (Rosario); two advanced-stage
projects (San Felipe and
Gavilanes) and an early-stage
exploration project (El Gachi). 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, such as
planned production and milling levels, costs, sales prices and
efficiencies, 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, including, that the Company's
financial condition and development plans do not change as a result
of unforeseen events, that third party ore to be milled by the
Company has properties consistent with management's expectations,
that the Company obtains all required regulatory approvals, and
that future metal prices and the demand and market outlook for
metals remains stable or improves. 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, lower production
levels, delays, and/or cessation in planned work, that the
Company's financial condition and development plans change, delays
in regulatory approval, risks associated with the interpretation of
data (including in respect of the third party ore), 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 Annual Information Form 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.
Financial outlook information contained herein about the
Company's prospective costs of production and sales prices is based
on assumptions about future events, as described above, based on
management's assessment of the relevant information currently
available. The purpose of such financial outlook is to provide
information about management's current expectations as to the
anticipated results of its proposed business activities for the
coming quarters. Readers are cautioned that any such financial
outlook information contained herein should not be used for
purposes other than for which it is disclosed herein.
Rosario Mine
The decision to commence production at the Rosario Mine was
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.
SOURCE SantaCruz Silver Mining Ltd.