SilverCrest Reports First Quarter 2024 Financial Results
Financial and Operational Flexibility Continue to Drive Strong Results
TSX: SIL | NYSE American: SILV
References to average realized gold and silver price, sustaining and non-sustaining capital expenditures, free cash flow, free cash flow per share (basic), working capital, operating cash flow before changes in working capital, operating cash flow before changes in working capital per share (basic), operating cash flow per share (basic), treasury assets, cash costs, and corporate all-in sustaining costs ("AISC") are described in more detail in the "Non-GAAP Financial Measures" section of this news release.
- Recovered 14,719 ounces ("oz") gold ("Au") and 1.4 million oz silver ("Ag"), or 2.6 million oz silver equivalent ("AgEq"1).
- Sold 15,000 oz Au and 1.4 million oz Ag (2.6 million oz AgEq) at average realized prices of
$2,062 /oz Au and$23.37 /oz Ag. - Revenue of
$63.6 million and cost of sales of$26.2 million . - Mine operating earnings of
$37.5 million (59% operating margin), exceeded the$36.9 million generated in Q4, 2023. - Net earnings of
$33.9 million or basic earnings of$0.23 per share. - Cash costs of
$7.09 per oz AgEq sold and AISC of$12.90 per oz AgEq sold. - Operating cash outflow of
$1.1 million and operating cash flow before changes in working capital of$17.6 million or$0.12 per share, after payment of 2023 taxes and duties which totaled$26.2 million . - Free cash flow was negative
$11.4 million or$0.08 per share for the quarter, due largely to the payment of 2023 taxes and duties and a$7.5 million prepayment for mining services. - Reported retained earnings of
$21.5 million on the Company's balance sheet at the end of the quarter, achieving this milestone in only the sixth quarter since commercial production was declared. - Ended the quarter with treasury assets totaling
$91.1 million ($71.1 million cash and$20.0 million in bullion) and no debt outstanding.
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1 |
Silver equivalent ("AgEq") ratio used in this news release of 79.51:1 based on the Las Chispas Operation Technical Report dated |
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.
OPERATIONAL |
Unit |
Q1, 2024 |
Q1, 2023 |
Ore mined |
tonnes |
85,737 |
63,600 |
Underground development |
km |
4.2 |
2.8 |
Ore milled(1) |
tonnes |
93,373 |
104,400 |
Average daily mill throughput |
tonnes per day ("tpd") |
1,026 |
1,160 |
|
|
|
|
Gold |
|
|
|
Average grade |
gpt |
4.97 |
4.06 |
Recovery |
% |
98.6 % |
97.5 % |
Recovered |
oz |
14,719 |
13,300 |
Sold |
oz |
15,000 |
14,200 |
|
|
|
|
Silver |
|
|
|
Average grade |
gpt |
479 |
419 |
Recovery |
% |
98.0 % |
91.9 % |
Recovered |
million oz |
1.41 |
1.29 |
Sold |
million oz |
1.40 |
1.36 |
|
|
|
|
Silver equivalent(2) |
|
|
|
Average grade |
gpt |
874 |
742 |
Recovery |
% |
98.3 % |
94.4 % |
Recovered |
million oz |
2.58 |
2.35 |
Sold |
million oz |
2.59 |
2.49 |
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FINANCIAL |
Unit |
Q1, 2024 |
Q1, 2023 |
Revenue |
$ millions |
$ 63.6 |
$ 58.0 |
Cost of sales |
$ millions |
$ (26.2) |
$ (22.4) |
Mine operating earnings |
$ millions |
$ 37.5 |
$ 35.6 |
Earnings for the period |
$ millions |
$ 33.9 |
$ 27.2 |
Earnings per share (basic) |
$/share |
$ 0.23 |
$ 0.18 |
Operating cash flow |
$ millions |
$ (1.1) |
$ 26.6 |
Operating cash flow per share (basic) |
$/share |
$ (0.01) |
$ 0.18 |
Free cash flow |
$ millions |
$ (11.4) |
$ 19.0 |
Free cash flow per share (basic) |
$/share |
$ (0.08) |
$ 0.13 |
Cash costs(2) |
$/oz AgEq |
$ 7.09 |
$ 7.36 |
AISC(2) |
$/oz AgEq |
$ 12.90 |
$ 10.90 |
|
Unit |
|
|
Cash and cash equivalents |
$ millions |
$ 71.1 |
$ 86.0 |
Bullion |
$ millions |
$ 20.0 |
$ 19.2 |
|
$ millions |
$ 91.1 |
$ 105.2 |
(1) |
Ore milled includes material from stockpiles and ore mined. |
(2) |
Q1, 2023 figures have been recast to align with the current period's presentation as follows: 1. Silver equivalent ounces sold have been adjusted to reflect a ratio of 79.51:1, used in the 2023 Technical Report, from the previous 86.9:1, and 2. Cash costs increased by |
In the quarter, a total of 85,737 tonnes were mined from the underground. Mining rates in Q1, 2024 averaged 942 tpd, a 10% increase from Q4, 2023. Ramp-up of the underground is planned to continue through 2024 with a target to exit the year at over 1,050 tpd. Key performance indicators which track the quality of mining, such as ore loss and mining dilution, continued to track to or better than plan.
The mobilization of the new underground mining contractor is largely on pace and continuing to progress, with good collaboration and coordination between the new and outgoing contractors contributing to the strong underground mining rates in the quarter. Mobilization of our new contractor is expected to continue through Q3, 2024.
In the quarter, the Company completed 4.2 km of horizontal and vertical underground development. Development rates and costs were inline with expectations.
Average daily mill throughput was 1,026 tpd in Q1, 2024, a decrease from previous quarters due to planned maintenance that was completed ahead of schedule. Process plant availability returned to 92% in
Average processed grades of 4.97 gpt Au and 479 gpt Ag, or 874 gpt AgEq marked a record for silver equivalent processed grades. These higher grades were strategically planned to offset the planned downtime in Q1, 2024, facilitated by sizable surface stockpiles and a flexible mine plan. Process grades are expected to moderate in Q2, 2024 as processing plant rates increase to be more inline with the expected average rate for the remainder of 2024 of 1,200 tpd.
Average process recoveries in Q1, 2024 were 98.6% Au and 98.0% Ag, or 98.3% AgEq, setting another record for the plant. These higher recoveries benefited from consistent and higher grade feed.
Sustaining capital totaled
During the quarter, cash costs averaged
AISC averaged
Beginning in H2, 2023 through Q1, 2024, a combination of infill (75%) and expansion (25%) drilling (161 holes totaling 34,384 metres) was completed to test Inferred resources that were identified as high priority for potential conversion to Indicated resources in the 2023 Technical Report. Approximately 10 million oz AgEq were targeted for potential conversion to Indicated resources in proximity to existing or planned underground development.
Drilling targeted the Babicanora Area where seven veins were tested. Drill results confirmed mineral continuity in these targets, with results in general verifying the grades and thicknesses of the targeted Inferred resource proximal to underground infrastructure as presented in the 2023 Technical Report. Opportunities for further expansion of mineralization were identified in the Babicanora Norte Splay 3 vein ("BAN Splay 3") and Babicanora Sur vein ("BAS") where drilling extended the mineralized footprint down dip and to the southeast of BAN Splay 3 and to the northwest of BAS beyond the initial area of the targeted Inferred resources. These results are being compiled and assessed for the potential conversion to Indicated resources for reserve consideration.
Drill intercept highlights from 161 drillholes are presented in the Company's Management's Discussion and Analysis for the three months ended
2024 Las Chispas and Regional Exploration Program
With the majority of the Las Chispas high priority Inferred resources now drill tested, exploration efforts will return to earlier stage targeting at Las Chispas and regionally.
The Company's strong regional geological knowledge and expertise is being applied to identify potential nearby satellite deposits which could eventually contribute additional feed to the Las Chispas plant. Throughout 2023 a regional evaluation program was carried out to identify priority opportunities. In 2024, a number of targets, including Picacho, have been chosen for further work including mapping, sampling, and drilling.
The 2024 exploration budget of
During Q1, 2024, the Company sold a total of 15,000 oz Au and 1.4 million oz Ag at average realized prices of
Q1, 2024 net earnings of
In Q1, 2024, cash flow used by operating activities was
The Company expects to pay a further $1.2 million in 2023 income taxes in Q2, 2024 and begin the payment of 2024 monthly income tax installments. Mining duties are paid annually in the first quarter based on the previous financial year. Guidance for tax payments related to taxable income generated in 2024 is
During the quarter, a total of
As at
Bullion assets increased by 4% during the quarter as a result of strong metal prices. Since undertaking the bullion holding strategy in Q1, 2023, bullion has outperformed all of the other currencies utilized by the Company and continues to add increased exposure to gold and silver for investors.
The Company's working capital was
In Q1, 2024 installation of two kilometres of pipeline for water conduction for agricultural use in the community was initiated as part of the Company's ongoing commitment to water stewardship.
Also in the quarter, work continued to advance efforts to integrate renewable solar power at Las Chispas. This program is expected to be underway through 2024 with a target to begin implementation of a solar installation in 2025. The benefits of this program are expected to include cost savings and a reduction in GHG emissions.
A conference call to discuss the Company's Q1, 2024 operational and financial results will be held
Date & Time: |
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Telephone: |
North America Toll Free: 1-800-274-8461 |
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Conference ID: SILVER (745837) |
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Webcast: |
SilverCrest is a Canadian precious metals producer headquartered in
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 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:
|
Three months ended
|
|
|
2024 |
2023 |
Gold revenue |
30,923 |
26,676 |
Gold ounces sold during the period |
15,000 |
14,200 |
Average realized gold price (per oz sold) |
$ 2,062 |
$ 1,879 |
|
|
|
Silver revenue |
32,723 |
31,307 |
Silver ounces sold during the period |
1,400,000 |
1,361,000 |
Average realized silver price (per oz sold) |
$ 23.37 |
$ 23.00 |
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:
|
Three months ended
|
|
|
2024 |
2023 |
Payments for mineral properties, plant and equipment |
$ 14,804 |
$ 7,930 |
Payments for equipment leases |
11 |
43 |
Total capital expenditures |
14,815 |
7,973 |
Less: Non-sustaining capital expenditures |
(4,586) |
(320) |
Sustaining capital expenditures |
$ 10,229 |
$ 7,653 |
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.
|
Three months ended
|
|
|
2024 |
2023(1) |
Operating cash flow |
$ (1,121) |
$ 26,617 |
Less: sustaining capital expenditures |
(10,229) |
(7,653) |
Free cash flow |
$ (11,350) |
$ 18,964 |
Free cash flow per share (basic) |
$ (0.08) |
$ 0.13 |
Weighted average shares outstanding (basic) |
146,954 |
147,200 |
(1) |
Q1, 2023 operating cash flow has been adjusted to include |
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.
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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Three months ended
|
|
|
2024 |
2023(1) |
Operating cash flow |
$ (1,121) |
$ 26,617 |
Less: change in working capital |
18,735 |
8,544 |
Operating cash flow before change in working capital |
$ 17,614 |
$ 35,161 |
Operating cash flow per share (basic) |
$ (0.01) |
$ 0.18 |
Operating cash flow before change in working capital per share (basic) |
$ 0.12 |
$ 0.24 |
Weighted average shares outstanding (basic) |
146,954 |
147,200 |
(1) |
Q1, 2023 operating cash flow has been adjusted to include |
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.
|
|
|
Cash and cash equivalents |
$ 71,085 |
$ 85,964 |
Bullion |
20,039 |
19,191 |
|
$ 91,124 |
$ 105,155 |
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.
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:
|
Three months ended
|
|
|
2024 |
2023(1) |
Production costs |
$ 18,203 |
$ 18,038 |
Government royalties |
190 |
294 |
Total cash costs |
18,393 |
18,332 |
General and administrative expenses |
4,695 |
3,533 |
Reclamation accretion expense |
136 |
107 |
Sustaining capital expenditures |
10,229 |
5,181 |
Total AISC |
$ 33,453 |
$ 27,153 |
Silver equivalent ounces sold (koz) |
2,593 |
2,490 |
Cash costs (per AgEq sold) |
$ 7.09 |
$ 7.36 |
AISC (per AgEq sold) |
$ 12.90 |
$ 10.90 |
(1) |
Q1, 2023 Figures have been recast to align with the current period's presentation as follows: 1. Silver equivalent ounces sold have been adjusted to reflect a ratio of 79.51:1, used in the 2023 Technical Report, from the previous 86.9:1, and 2. Cash costs increased by |
This news release contains "forward-looking statements" and "forward-looking information" (collectively "forward-looking statements") within the meaning of applicable Canadian and
The Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects for this news release is
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