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Thursday, 14 March 2013
SilverCrest Mines impresses with strong financials
SilverCrest Mines (CVE:SVL)(NYSE MKT:SVLC) reported Thursday a sharp boost in fourth quarter profit on the back of lower annual income taxes, and as silver sales reached a quarterly record.
For the quarter that ended December 31, net earnings were $13.62 million, or 13 cents per diluted share, compared to a profit of $9.86 million, or 11 cents per share, in the year earlier period.
The Mexico-focused company told investors the increase in earnings was mainly driven by a lower annual Mexican income tax estimate, which it was eligible for due to the settlement of a hedging facility in the fourth quarter.
Silver and gold revenues were $18.24 million compared to $18.26 million a year earlier. But on a cash basis, these revenues increased 47 percent to $17.61 million from record silver sales and more gold sales realized at market spot prices.
The company said in the statement that revenue "should be recorded at its fair value", which for gold and silver is the market spot price on the date revenue is recognized.
Silver sales were 43 percent higher at 171,714 ounces, with average realized silver prices remaining steady at $32 per ounce.
Cash operating costs per silver equivalent ounce sold were higher, at $8.05 per ounce, versus $5.65 an ounce in the same quarter the previous year due to higher overall operating costs based on lower grade ore mined.
Cash flow from operations, a key metric in the mining industry, rose to $10.59 million, from $6.82 million a year earlier.
"We are extremely pleased with the financial performance achieved in 2012. It is rewarding to deliver strong financial results that mirror Santa Elena's production performance," said the company in a statement Thursday, citing president J. Scott Drever.
"Our management group in Vancouver and operating team in Mexico continue to do an excellent job and should be congratulated for achieving cash flow of $0.44 per share and earnings of $0.33 per share."
Drever said he looks forward to another "strong financial year" in 2013, with an expected increase in silver production to 625,000 ounces and consistent gold output of 33,000 ounces. Cash costs are anticipated to remain steady at or below $8.50 per silver equivalent ounce. Estimated annual operating costs are $20.7 million.
The company's plan this year is to complete the contruction of a new 3,000 tonne per day mill facility on schedule for the first quarter of 2014 at its Santa Elena mine in Mexico, where it is looking to double production.
Gecko Research, a company comprised of a small number of Swedish private investors who share investment ideas through their newsletters, said today that SilverCrest Mines "is a strong company and it proves that after good performance in 2012".
"It's these kinds of companies we want to own, well financed and profitable in good jurisdictions," they said.
"SilverCrest has actually been more of a gold company when looking at where revenues has come from in 2012, but this is about to change. Santa Elena will double its total production by next year by going underground and a few years down the line we hope to see La Joya come online as well."
The company is rapidly advancing the delineation of a large polymetallic deposit at La Joya, where it is working to complete a preliminary economic assessment and file an updated resource report.
Shares of SilverCrest were flat today, at $2.55, but are up by more than 7 percent in the last three months.