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silvercrest metals shines with stellar q1 2024 financials and mining achievements 1955


SilverCrest Metals Shines with Stellar Q1 2024 Financials and Mining Achievements


Michael Chen

May 14, 2024 - 20:59 pm


SilverCrest Metals Reports Financial and Operational Strength in Q1 2024

VANCOUVER, BC, May 14, 2024 – SilverCrest Metals Inc. ("SilverCrest" or the "Company"), a dynamic mining enterprise, is proud to announce its first-quarter financial results for 2024, ending March 31, 2024. These results offer a comprehensive glimpse into the company's financial and operational health, building on the operational highlights released on April 17, 2024, for the company's Las Chispas Operation in Sonora, Mexico. All reported figures are in U.S. dollars unless specified otherwise.

N. Eric Fier, CEO of SilverCrest, expressed satisfaction with the company's performance, noting, "We are proud to deliver another quarter of strong financial and operational performance. Our results reflect the operational and financial flexibility we've worked to create. The quarter showcased many successes, including the planned transition to a new underground mining contractor in February, which benefited from outstanding cooperation between the new and outgoing contractors. This led to a 10% increase in average daily mining rates from Q4, 2023. Additionally, our ability to blend surface stockpiles and underground mining contributed to record silver equivalent process grades of 874 grams per tonne and recoveries of 98.3%, surpassing expectations in silver equivalent sales, despite planned plant maintenance. Our financial resilience allowed for a planned payment of 2023 taxes and duties amounting to $26.2 million, and we still ended the quarter with a robust treasury, inclusive of $20.0 million in bullion. Our financial strategy affords us the flexibility to hold bullion, thus increasing our shareholders' exposure to precious metals without additional operating risk. This strong start to the year positions us favorably to deliver on our 2024 guidance."

Q1 2024 Highlights

SilverCrest showcased significant mining productivity and sales achievements during the first quarter:

  • Gold and silver recovery was impressive, with 14,719 ounces of gold and 1.4 million ounces of silver recovered, totaling 2.6 million ounces in silver equivalent.
  • The company successfully sold 15,000 ounces of gold and 1.4 million ounces of silver, amounting to 2.6 million ounces in silver equivalent, at average realized prices of $2,062 per gold ounce and $23.37 per silver ounce.
  • Revenue reached $63.6 million, with a cost of sales of $26.2 million, signifying robust operational execution.
  • Mine operating earnings totaled $37.5 million, which reflects a 59% operating margin and surpasses the $36.9 million earned in Q4, 2023.
  • Net earnings amounted to $33.9 million, approximating to $0.23 per basic share.
  • The company recorded low cash costs of $7.09 per ounce of silver equivalent sold and all-in sustaining costs (AISC) of $12.90 per ounce, demonstrating cost-effective operations.
  • Despite sizeable tax and duty payments, SilverCrest ended the quarter with a healthy total in treasury assets of $91.1 million, which included $71.1 million in cash and $20.0 million in bullion, without any debt outstanding.

First Quarter Operating Performance

SilverCrest's operating performance was solid, underpinned by fundamental metrics that measure the company's financial health and capacity to generate cash flow. These include capital expenditures categorized as sustaining and non-sustaining, operating cash flow calculations before and after changes in working capital, and free cash flow metrics.

Q1 2024 Performance

Mining Excellence

During the quarter, underground mining operations reflected a noticeable advancement, with 85,737 tonnes extracted. Average mining rates increased to 942 tonnes per day, reflecting a 10% boost from Q4, 2023. The company anticipates further progress throughout 2024, targeting an exit rate of over 1,050 tonnes per day by year-end.

The newly mobilized underground mining contractor played a crucial role, efficiently collaborating with the outgoing contractor. This synergy led to stronger underground mining rates. SilverCrest anticipates this momentum to persist until Q3, 2024.

Underground expansion continued at a steady pace, with 4.2 km of development completed in line with expectations.

Process Plant Proficiency

The processing plant reported an average daily mill throughput of 1,026 tonnes per day in Q1, 2024, with a slight decrease from previous quarters owing to maintenance that concluded ahead of schedule. By March 2024, the plant's availability climbed back to 92%, matching the projected availability range.

Record processing grades of 4.97 grams per tonne of gold, 479 grams per tonne of silver, and a silver equivalent grade of 874 grams per ton were attained. These elevated grades were tactically planned to counterbalance anticipated downtime, with the support of extensive surface stockpiles and adaptive mining plans. SilverCrest anticipates process grades to normalize in the second quarter as processing plant rates rise, aligning with the 2024 average rate of 1,200 tonnes per day.

The process plant also achieved record recoveries in the quarter, with 98.6% for gold, 98.0% for silver, and an impressive 98.3% for silver equivalent, benefiting notably from consistent high-grade feeds.

Sustaining Capital Highlights

Sustaining capital investments for the quarter totaled $10.2 million, chiefly attributed to underground development expenses and infrastructure. This was less than planned due to the deferment of some payments and project implementations, which are expected to be completed in Q2, 2024. Despite these delays, production is not anticipated to be affected, with 2024 sustaining capital expenditures projected to reach between $40.0 and $44.0 million.

Cost Efficiency

Cash costs averaged $7.09 per ounce of silver equivalent sold during the first quarter, outperforming the guidance range of $9.50 to $10.00 per ounce. The positive variance can be attributed to lower volumes processed, superior grades, and reduced maintenance expenses. However, SilverCrest expects cash costs to rise throughout the remainder of the year, aligning with the full-year guidance for 2024.

All-in sustaining costs averaged $12.90 per ounce of silver equivalent sold for the first quarter, surpassing expectations primarily due to a mix of lower cash costs and sustaining capital expenditures. The company foresees an increase in AISC for Q2, however, reaffirms its annual AISC guidance for 2024 with a range of $15.00 to $15.90 per ounce.

Exploration Initiatives

The company concluded a blend of infill (75%) and expansion (25%) drilling spanning 161 holes and 34,384 meters from the second half of 2023 through Q1, 2024. This exploration targeted Inferred resources regarded as high priority for potential conversion to Indicated resources as delineated in the 2023 Technical Report. The ambition was to potentially convert approximately 10 million ounces of silver equivalent to Indicated resources, located proximally to existing or envisioned underground developments.

Targeting Inferred Resources

Drilling focused on the Babicanora Area where seven veins underwent testing. Drill results affirmed the mineral continuity in these targets, with findings generally confirming the Inferred resource grades and thicknesses adjacent to underground infrastructure, as reported in the 2023 Technical Report.

Additionally, drilling extended the mineralized footprint down dip and to the southeast of the Babicanora Norte Splay 3 vein and to the northwest of the Babicanora Sur vein. These extensions surpass the initial area of the Inferred resources targeted. Results are currently under evaluation for the potential upgrade to Indicated resources for reserves consideration, highlighted in the Company's Management's Discussion and Analysis for the period ending March 31, 2024.

2024 Las Chispas and Regional Exploration Program

SilverCrest's exploration strategy is set to pivot back to early-stage targeting at Las Chispas and in the broader region. The company aims to tap into potential satellite deposits in its vicinity, which could ultimately contribute additional feed to the Las Chispas plant. In 2023, a regional evaluation program identified several high-priority targets, with planned mapping, sampling, and drilling throughout 2024.

The comprehensive exploration budget of $12.0 to $14.0 million for the year includes these regional initiatives.

Financial Review: Strengthening Economic Foundations

Revenue Growth

During Q1, the company attained significant revenue from the sale of gold and silver, a clear testament to the effective pricing strategy and enhanced production volumes. The generated revenue marked a significant increase over the same period in the previous year, laid on the back of heightened gold and silver prices and quantities sold.

Income Escalation

Notably, net earnings reached $33.9 million in the reviewed quarter, soaring past the figures of the same quarter in the previous year. This increase reflects benefits from reduced taxes due to effective utilization of tax attributes, burgeoning mine operating earnings attributable to enhanced metal prices and sales volumes, and profit from other income streams. The consistent yet moderate effective tax rate amplifies the company's bottom line.

Robust Cash Flow

The first quarter observed a cash flow used by operating activities at SilverCrest of $1.1 million. This outcome was primarily influenced by substantial payments for taxes and duties and prepayments for mining services, which were offset by solid cash mine operating gains.

SilverCrest anticipates additional tax payments for the subsequent quarter and the commencement of monthly income tax installments for 2024. The projection for tax payments related to 2024 taxable income ranges from $28.0 to $33.0 million, based on specified metal prices and currency exchange rates.

Free cash flow faced a deficit of $11.4 million, mainly due to the notable tax and duty payments. Nevertheless, sustaining capital expenditures and sound operating cash flow cushioned the impact.

Solidifying a Debt-Free Position

With respect to financial position, the company's treasury assets, a combination of cash, cash equivalents, and bullion, remained robust at the quarter's end. This prudent financial management ensures that SilverCrest maintains strong liquidity and remains debt-free, with an untouched revolving facility of $70 million at its disposal.

The holding of bullion assets represents a strategic move by the company, which has paid off by outperforming other utilized currencies and delivering increased gold and silver exposure to investors.

Commitment to Sustainable Practices

In line with ESG principles, SilverCrest has initiated infrastructure projects, such as the installation of water pipelines for agricultural purposes in surrounding communities, reflecting its commitment to water stewardship. Moreover, the company is progressing towards incorporating renewable solar power into the Las Chispas Operation, with prospects of lowering costs and GHG emissions upon its implementation in 2025.

Conference Call and Presentation Details

SilverCrest will host a conference call on Wednesday, May 15, 2024, at 8:00 a.m. PT / 11:00 a.m. ET, to discuss the Q1 operational and financial results. Interested parties are invited to participate in the call by dialing North America Toll-Free: 1-800-274-8461 with the Conference ID: SILVER (745837). Participants can also access the webcast at SilverCrest Metals Investor Presentations.

About SilverCrest Metals Inc. Located in Vancouver, BC, SilverCrest Metals Inc. is a premier Canadian precious metals producer with a sharp focus on its Las Chispas Operation in Sonora, Mexico. The company is dedicated to expanding its asset base through the development of high-value precious metal projects and operational excellence. SilverCrest's management team boasts extensive experience across all areas of the precious metal mining sector.

Non-GAAP Financial Measures

The company's financial statements and management divide capital expenditures into sustaining and non-sustaining expenditures based upon the nature of the activity. Management uses various non-GAAP financial measures such as average realized gold and silver price, capital expenditures, free cash flow, working capital, operating cash flow before change in working capital, and treasury assets, which are defined and reconciled to the most directly comparable GAAP measures within the content provided.

AndFeel free to contact SilverCrest Metals Inc. for further information regarding the contents of this news release.

Forward-Looking Statements Disclaimer

This news release contains forward-looking statements regarding the company's 2024 guidance, future production, strategic plans, exploration program expectations, working capital requirements, cash costs, expected recoveries, and various financial metrics. These statements are based on multiple assumptions that might prove inaccurate, and actual results could differ materially. SilverCrest Metals Inc. cautions readers not to place undue reliance on forward-looking statements, which reflect management's expectations and beliefs only as of their respective dates.

Qualified Persons

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, CEO for SilverCrest, who has reviewed and approved its contents.

SOURCE: SilverCrest Metals Inc.