SilverCrest Mines (CVE:SVL)(OTCQX:STVZF) announced Tuesday that it swung to a profit in both the fourth quarter and full year 2011 after only nine months of commercial production from its Santa Elena mine in Mexico.
For the quarter that ended December 31, the company posted
comprehensive earnings of $10.38 million, or 12 cents per share, versus a
comprehensive loss of $5.94 million, or a loss of 10 cents per share,
in the fourth quarter of 2010.
For the full year, earnings rose to $8.43 million, or 11 cents per
share, versus a loss of $20.0 million, or a 33 cent per-share-loss in
Reported revenues for the 2011 year were $41.87 million, including
$18.26 million in the final quarter. Of the $18.26 million in the final
quarter, $5.53 million were non-cash revenues for adjustments to gold
spot market prices related to hedge facility deliveries.
"We are extremely pleased with the financial performance achieved in 2011, " said president J. Scott Drever.
"Having achieved cash flow of $0.19 and earnings of $0.11 per share
from only 9 months of commercial production at Santa Elena is due to the
extraordinary performance of both our operations team in Mexico and our
management group in Vancouver.
"We have made significant progress on all fronts and achieved or bettered our targets in all major measures of performance."
Mine operating earnings amounted to $12.97 million and $28.96 million for the fourth quarter and full year 2011, respectively.
In the fourth quarter, the company said it sold 666,303 ounces of
silver equivalent, versus 70,168 ounces in the prior year period.
Silver sales in the three month period were 120,199 ounces, up from
27,356 in 2010, at an average realized price of $31.72 per ounce.
During Santa Elena's first year of production, the company said the
mine, which entered commercial production in July 2011, produced 377,071
ounces of silver and 26,969 ounces of gold - or 1,737,418 ounces of
silver equivalent in 2011. First metal was poured at Santa Elena in
Cash operating cost per silver equivalent ounce sold was $5.65 in the latest reported quarter, and $7.79 for 2011.
Cash flow from operations in the quarter, a key metric to measure a
miner's ability to fund future operations, totalled $6.82 million, up
from $203,072 a year ago.
For the year, cash flow from operations came in at $14.7 million, or 19 cents per share.
Cash and equivalents at year-end stood at $25.9 million, with working capital of $24.1 million.
"Our strong cash position and cash flow assures we can continue with
our Expansion Plan to double production at Santa Elena and aggressively
explore the La Joya property where the Company has a major new silver-
gold - copper discovery," continued Drever.
In the fourth quarter, the company booked a $908,683 gain on
derivative instruments, compared to a loss of $6.16 million in the same
period in 2010. The company said the gain relates to the incremental
fair value of the MBL Hedging Facility, which represents the difference
between the average market spot price of gold for the quarter and strike
price of $926.50 per ounce.
Looking ahead to the year, the company's immediate focus is to
operate its flagship Santa Elena open pit silver and gold mine, and
continue with its three year expansion plan to double metals production,
and to rapidly advance the definition of a large polymetallic deposit
at the La Joya property.
For Santa Elena, SilverCrest said it expects annual production of
33,000 ounces of gold and 435,000 ounces of silver in 2012, with an
average cash operating cost of $8.20 per ounce of silver equivalent.
The company anticipates operating cash flow of more than $2 million
per month, based on $1,600 per ounce of gold and $30 per ounce of
Underground development and drilling to expand underground resources
at the mine will be completed in 2012, with a budgeted capital
expenditure of around $20 million for the year, including the expansion
plan and exploration.
As part of the expansion plan, a pre-feasibility study on the Cruz de Mayo satellite deposit at the project is planned.
Vancouver-based SilverCrest Mines' Santa Elena mine is located 150
kilometres northeast of Hermosillo, near Banamichi in the State of
The company anticipates that the 2,500 tonnes per day facility should
recover approximately 4.8 million ounces of silver and 179,000 ounces
of gold over the 6.5 year life of the open pit phase.
In addition to this mine, exploration programs are advancing the
definition of a large polymetallic deposit at the La Joya property in
Durango, Mexico. In 2012, the company will aim to complete phase II
drilling of roughly 80 holes, and explore the Coloradito, Esperanza and
Santo Nino targets next to the main mineralized trend.
SilverCrest is also planning to issue a revised resource estimate at
La Joya using the phase II results in the fourth quarter.
The silver miner's stock is up more than 17.7 percent year-to-date, and is currently changing hands Tuesday at around $2.26.