SilverCrest Reports Second Quarter 2024 Financial Results
Record Operating Earnings Drives Treasury Growth
2024 Sales Guidance Increased and Cash Cost and AISC Guidance Reduced
TSX: SIL | NYSE American: SILV
With gold and silver prices remaining robust and strong operational performance continuing at the start of H2 2024, we are well positioned to benefit from continued momentum and are pleased to increase our 2024 sales guidance and reduce our annual cash cost and all-in sustaining cost guidance".
Q2 2024 Highlights
- Recovered 15,303 ounces ("oz") gold ("Au") and 1.5 million oz silver ("Ag"), or 2.7 million oz silver equivalent ("AgEq")(2).
- Sold 14,500 oz Au and 1.4 million oz Ag, or 2.6 million oz AgEq, for H1 2024 sales to 29,500 oz Au and 2.8 million oz Ag, or 5.2 million oz AgEq, resulting in an increase to 2024 sales guidance to 10.0 to 10.3 million oz AgEq. Average realized prices for the quarter were
$2,237 per oz Au(1) and$27.84 per oz Ag(1). - Record quarterly revenue of
$72.7 million , exceeded revenue of$63.6 million in Q1 2024. - Record mine operating earnings of
$41.5 million (57% operating margin), exceeded the$37.5 million generated in Q1 2024. - Net earnings of
$6.5 million or basic earnings of$0.04 per share ($33.9 million or$0.23 per share in Q1 2024) was negatively impacted by non-cash deferred tax expense of$14.3 million and foreign exchange losses of$2.8 million which were as a result of the depreciation of the peso following the Mexican general election in early June. - Cash costs of
$8.87 per oz AgEq(1) in the quarter and$7.98 per oz AgEq(1) in H1 2024 were better than initial guidance, allowing for a reduction to 2024 guidance to$9.25 to$9.75 per oz AgEq. - All-in sustaining cost ("AISC") of
$16.88 per oz AgEq(1) increased from Q1 2024, as expected, due largely to the advancement of mine development and projects, and a$1.0 million impairment of materials and supplies inventories recorded during the quarter. H1 2024 AISC of$14.89 per oz AgEq (1) was also below initial annual guidance, allowing for a reduction to 2024 guidance to$14.90 to$15.75 per oz AgEq. - Mining rates increased to 1,099 tpd, benefiting from maintaining two mining contractors at site through the quarter.
- Operating cash flow was
$39.6 million and operating cash flow before changes in working capital was$31.8 million or$0.22 per share(1). Both figures are net of the payment of taxes and duties, which totaled$14.4 million . - Free cash flow generation of
$24.3 million or$0.16 per share(1) for the quarter, an increase of$35.7 million from Q1 2024. - Increased retained earnings by 30% to
$28.0 million , from$21.5 million at the end of Q1 2024. - Ended the quarter with treasury assets totaling
$122.3 million (1) ($98.3 million cash and$24.0 million in bullion), an increase of 34% from$91.1 million at the end of Q1 2024.
(1) |
Refer to the "Non-GAAP Financial Measures" disclosure at the end of this press release and associated MD&A for a description and calculation of these measures. |
(2) |
Silver equivalent ("AgEq") ratio used in this news release of 79.51:1 based on the Las Chispas Operation Technical Report dated |
Revised 2024 Guidance
In H1 2024, silver equivalent sales totaled 5.2 million oz AgEq with cash costs and AISC averaging
Based on strong results in the first half of 2024 and the outlook for the remainder of the year, the Company is improving the guidance range for AgEq sales to 10.0 to 10.3 million oz. The Company is also lowering its full-year 2024 cash costs estimate to be between
Guidance Metric |
Unit |
2024 Original Guidance |
2024 Revised Guidance |
Silver Equivalent ("AgEq") Ounces |
million oz sold |
9.8 to 10.2 |
10.0 to 10.3 |
Cash Costs (1) |
$/oz AgEq sold |
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AISC (1) |
$/oz AgEq sold |
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(1) |
Refer to the "Non-GAAP Financial Measures" disclosure at the end of this press release and associated MD&A for a description and calculation of these measures. |
2024 sustaining capital guidance of
Second Quarter Operating Performance
The following operating performance refers to operating cash flow per share (basic), free cash flow, free cash flow per share (basic), cash costs, AISC, and treasury assets which are described in more detail in the "Non-GAAP Financial Measures" section of this news release.
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OPERATIONAL |
Unit |
2024 |
2023 |
2024 |
2023 |
Ore mined |
tonnes |
100,019 |
74,400 |
185,756 |
138,000 |
Underground development |
kilometres ("km") |
4.7 |
3.4 |
8.8 |
6.3 |
Ore milled(1) |
tonnes |
110,645 |
107,900 |
204,018 |
212,300 |
Average daily mill throughput |
tonnes per day ("tpd") |
1,216 |
1,186 |
1,121 |
1,173 |
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Gold |
|
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Average grade |
grams per tonne ("gpt") |
4.36 |
4.84 |
4.64 |
4.46 |
Recovery |
% |
98.6 % |
98.4 % |
98.6 % |
98.0 % |
Recovered |
oz |
15,303 |
16,500 |
30,022 |
29,800 |
Sold |
oz |
14,500 |
13,400 |
29,500 |
27,600 |
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Silver |
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Average grade |
gpt |
418 |
449 |
446 |
434 |
Recovery |
% |
98.3 % |
97.9 % |
98.1 % |
95.1 % |
Recovered |
million oz |
1.46 |
1.53 |
2.87 |
2.82 |
Sold |
million oz |
1.45 |
1.45 |
2.85 |
2.81 |
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Silver equivalent |
|
|
|
|
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Average grade |
gpt |
765 |
834 |
815 |
789 |
Recovery |
% |
98.4 % |
98.1 % |
98.3 % |
96.4 % |
Recovered |
million oz |
2.68 |
2.84 |
5.26 |
5.19 |
Sold |
million oz |
2.60 |
2.52 |
5.19 |
5.01 |
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FINANCIAL |
Unit |
2024 |
2023 |
2024 |
2023 |
Revenue |
$ millions |
$ 72.7 |
$ 62.0 |
$ 136.4 |
$ 120.0 |
Cost of sales |
$ millions |
$ (31.3) |
$ (23.7) |
$ (57.4) |
$ (46.1) |
Mine operating earnings |
$ millions |
$ 41.5 |
$ 38.3 |
$ 79.0 |
$ 73.9 |
Earnings for the period |
$ millions |
$ 6.5 |
$ 23.7 |
$ 40.4 |
$ 50.9 |
Earnings per share (basic) |
$/share |
$ 0.04 |
$ 0.16 |
$ 0.27 |
$ 0.35 |
Operating cash flow |
$ millions |
$ 39.6 |
$ 54.7 |
$ 38.5 |
$ 81.3 |
Operating cash flow per share (basic) |
$/share |
$ 0.27 |
$ 0.37 |
$ 0.26 |
$ 0.55 |
Free cash flow |
$ millions |
$ 24.3 |
$ 44.6 |
$ 13.0 |
$ 66.0 |
Free cash flow per share (basic) |
$/share |
$ 0.16 |
$ 0.30 |
$ 0.09 |
$ 0.45 |
Cash costs(2) |
$/oz AgEq |
$ 8.87 |
$ 7.44 |
$ 7.98 |
$ 7.40 |
AISC(2) |
$/oz AgEq |
$ 16.88 |
$ 12.65 |
$ 14.89 |
$ 11.78 |
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Cash and cash equivalents |
$ millions |
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|
$ 98.3 |
$ 86.0 |
Bullion |
$ millions |
|
|
$ 24.0 |
$ 19.2 |
|
$ millions |
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|
$ 122.3 |
$ 105.2 |
(1) |
Ore milled includes material from stockpiles and ore mined. |
(2) |
Q1 2023 figures have been recast to align with the presentation of the current period. For the three and six months ended |
Mine
In the quarter, a total of 100,019 tonnes were mined from the underground. Mining rates in Q2 2024 averaged 1,099 tpd, a 17% increase from Q1 2024, and above the originally targeted 2024 exit rate of 1,050 tpd. The Company completed 4.7 km of horizontal and vertical underground development, 0.9 km ahead of plan.
Mining rates and underground development continue to track above expected rates from the 2023 Technical Report as a direct result of the operational focus on ramp up efforts and having two underground mining contractors working simultaneously at Las Chispas, which has continued at the start of H2, 2024.
Plant
Average daily mill throughput was 1,216 tpd in Q2 2024, inline with the expected average rate for the remainder of 2024 of 1,200 tpd. Process plant availability was 93.7% for the quarter, inline with plan and a record for the plant.
Average processed grades of 4.36 gpt Au and 418 gpt Ag, or 765 gpt AgEq compared to Q1 2024 grades of 4.97 gpt Au and 479 gpt Ag, or 874 gpt AgEq. Processed grades were lower in the quarter, as expected, but remained above reserve grade.
Average process recoveries in Q2 2024 were 98.6% Au and 98.3% Ag, or 98.4% AgEq, which was another record for the plant.
Production
The Company produced 2.7 million oz AgEq in Q2 2024, up from 2.6 million oz AgEq in Q1 2024. This increase was primarily due to higher mill throughput following planned maintenance in the prior quarter.
Sustaining Capital
Sustaining capital totaled
Cash Costs and AISC
During the quarter, cash costs averaged
Cash costs for H1 2024 averaged
AISC averaged
As discussed in the 'Revised 2024 Guidance" section, 2024 cash cost and AISC guidance has been lowered to reflect strong H1 2024 performance on both metrics.
Exploration
The Company continued its exploration program at Las Chispas, focusing on converting high-potential Inferred resources to Indicated resources with additional focus on identifying new targets at Las Chispas and regionally. The expenditures for this program were
Selected Q2 2024 Financial Results
Revenue
During Q2 2024, the Company sold a total of 14,500 oz Au and 1.4 million oz Ag at average realized prices of
Net Earnings
Q2 2024 net earnings of
Cash Flow
In Q2 2024, cash flow generated by operating activities was
During the quarter, the Company remitted
During the quarter, the Company recorded mineral properties, plant and equipment additions of
Q2 2024 free cash flow of
Financial Position
As at
Bullion assets increased by 20% during the quarter as a result of adding
The Company's working capital was
Environmental, Social and Governance ("ESG")
In Q2 2024, SilverCrest achieved 90% completion of the latest phase of the reconstruction of the local sewage system in
Subsequent to quarter, SilverCrest released its second annual ESG Report. The 2023 ESG Report supports the Company's ongoing efforts to make a valuable difference in the lives of stakeholders in the communities in which it operates. By identifying initiatives and earmarking funds through materiality assessments, a
Management Change
Effective immediately, SilverCrest's Board of Directors has named
As part of the management change
Q2 2024 Conference Call
A conference call to discuss the Company's Q2 2024 operational and financial results will be held
Date & Time:
Telephone: North America Toll Free: 1-800-274-8461
Conference ID: SILVER (745837)
Webcast: https://silvercrestmetals.com/investors/presentations/
ABOUT
SilverCrest is a Canadian precious metals producer headquartered in
Non-GAAP Financial Measures
Management believes that the following non-GAAP financial measures will enable certain investors to better evaluate the Company's performance, liquidity, and ability to generate cash flow. These measures do not have any standardized definition under IFRS, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate these measures differently.
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. The following table reconciles revenue and metal sold during the period with average realized prices:
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2024 |
2023 |
2024 |
2023 |
Gold revenue |
32,432 |
26,680 |
63,355 |
53,356 |
Gold ounces sold during the period |
14,500 |
13,400 |
29,500 |
27,600 |
Average realized gold price (per oz sold) |
$ 2,237 |
$ 1,991 |
$ 2,148 |
$ 1,933 |
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Silver revenue |
40,309 |
35,319 |
73,032 |
66,626 |
Silver ounces sold during the period |
1,448,000 |
1,450,000 |
2,848,000 |
2,811,000 |
Average realized silver price (per oz sold) |
$ 27.84 |
$ 24.36 |
$ 25.64 |
$ 23.70 |
Capital expenditures
Capital expenditures are classified into sustaining capital expenditures or non-sustaining capital expenditures depending on the nature of the expenditure. Sustaining capital expenditures are those required to support current production levels. Non-sustaining capital expenditures represent the capital spending at new projects and major, discrete projects at existing operations intended to increase production or extend mine life. Management believes this to be a useful indicator of the purpose of capital expenditures and this distinction is an input into the calculation of AISC.
The following table reconciles payments for mineral properties, plant and equipment, and equipment leases to sustaining and non-sustaining capital expenditures:
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2024 |
2023 |
2024 |
2023 |
Payments for mineral properties, plant and equipment |
$ 19,544 |
$ 12,919 |
$ 34,348 |
$ 20,849 |
Payments for equipment leases |
36 |
28 |
47 |
71 |
Total capital expenditures |
19,580 |
12,947 |
34,395 |
20,920 |
Less: Non-sustaining capital expenditures |
(4,327) |
(2,844) |
(8,913) |
(5,636) |
Sustaining capital expenditures |
$ 15,253 |
$ 10,103 |
$ 25,482 |
$ 15,284 |
Free cash flow
Free cash flow subtracts sustaining capital expenditures from net cash provided by operating activities, serving as a valuable indicator of our capacity to generate cash from operations post-sustaining capital investments. The following table reconciles this non-GAAP financial measure to the most directly comparable IFRS measure.
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2024 |
2023 |
2024 |
2023 |
Operating cash flow (1) |
$ 39,573 |
$ 54,716 |
$ 38,452 |
$ 81,333 |
Less: sustaining capital expenditures |
(15,253) |
(10,103) |
(25,482) |
(15,284) |
Free cash flow |
$ 24,320 |
$ 44,613 |
$ 12,970 |
$ 66,049 |
Free cash flow per share (basic) |
$ 0.16 |
$ 0.30 |
$ 0.09 |
$ 0.45 |
Weighted average shares outstanding (basic) |
147,728 |
147,231 |
147,341 |
147,216 |
(1) |
For the three and six months ended |
Working capital
Working capital is calculated as current assets less current liabilities. The Company uses working capital as a measure of the Company's operational efficiency and short-term financial health.
Operating cash flow before change in working capital
The Company uses operating cash flow before change in working capital to determine the Company's ability to generate cash flow from operations, and is calculated by adding back the change in working capital to operating cash flow as reported in the consolidated statements of cash flows.
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2024 |
2023 |
2024 |
2023 |
Operating cash flow (1) |
$ 39,573 |
$ 54,716 |
$ 38,452 |
$ 81,333 |
Less: change in working capital |
(7,802) |
(6,333) |
10,933 |
2,211 |
Operating cash flow before change in working capital |
$ 31,771 |
$ 48,383 |
$ 49,385 |
$ 83,544 |
Operating cash flow per share (basic) |
$ 0.27 |
$ 0.37 |
$ 0.26 |
$ 0.55 |
Operating cash flow before change in working capital per share (basic) |
$ 0.22 |
$ 0.33 |
$ 0.34 |
$ 0.57 |
Weighted average shares outstanding (basic) |
147,728 |
147,231 |
147,341 |
147,216 |
(1) |
For the three and six months ended |
SilverCrest calculates treasury assets as cash and cash equivalents plus bullion as reported in the consolidated statements of financial position. Management believes that treasury assets provide a useful measure of the Company's most liquid assets that can be used to settle short-term obligations or provide liquidity.
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Cash and cash equivalents |
$ 98,320 |
$ 85,964 |
Bullion |
24,026 |
19,191 |
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$ 122,346 |
$ 105,155 |
Cash costs
Cash costs include production costs, and government royalties. Management uses this measure to monitor the performance of its mining operation and ability to generate positive cash flow on a site basis.
AISC
All-in sustaining costs, a non-GAAP financial measure, starts with cash costs and includes general and administrative costs, reclamation accretion expense and sustaining capital expenditures. Management uses this measure to monitor the performance of its mining operation and ability to generate positive cash flow on an overall company basis.
Cash costs and AISC are calculated as follows:
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2024 |
2023 |
2024 |
2023 |
Production costs |
$ 22,680 |
$ 18,402 |
$ 40,883 |
$ 36,440 |
Government royalties |
386 |
314 |
576 |
608 |
Total cash costs (1) |
23,066 |
18,716 |
41,459 |
37,048 |
General and administrative expenses |
5,437 |
2,881 |
10,132 |
6,414 |
Reclamation accretion expense |
140 |
116 |
276 |
223 |
Sustaining capital expenditures |
15,253 |
10,103 |
25,482 |
15,284 |
Total AISC |
$ 43,896 |
$ 31,816 |
$ 77,349 |
$ 58,969 |
Silver equivalent ounces sold (koz) |
2,601 |
2,515 |
5,194 |
5,005 |
Cash costs (per AgEq sold) |
$ 8.87 |
$ 7.44 |
$ 7.98 |
$ 7.40 |
AISC (per AgEq sold) |
$ 16.88 |
$ 12.65 |
$ 14.89 |
$ 11.78 |
(1) |
2023 Figures have been recast to align with the current period's presentation. For the three and six months ended |
Forward-Looking Statements
This news release contains "forward-looking statements" and "forward-looking information" (collectively "forward-looking statements") within the meaning of applicable Canadian and
Qualified Persons Statement
The Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects for this news release is
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