SilverCrest Mines swings to profit in Q4, FY 2011, continues expansion of Santa Elena

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 2010.
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 September 2010.
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 silver.
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 Sonora, México.
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.