2013 Operating Highlights (Compared to 2012)
- Produced 779,026 ounces of silver, up 34%.
- Produced 31,099 ounces of gold, down 6%.
- Produced 2.66 million AgEq ounces in 2013, up 12%.
- Silver and gold ore grade (GPT) loaded on pad up 52% and 13% respectively.
- Average strip ratio (waste to ore) reduced from 4.25:1 to 2.56:1, a 40% decrease.
The company has not yet released its fourth quarter and full year financial results. That being said, following are financial highlights for the third quarter of 2013:
Q3, 2013 Financial Highlights (Compared to Q3, 2012)
- Cash flow from operations $7.1 million ($0.07 per share) a decrease of 30%
- Cash operating cost per silver equivalent ounce sold increased 5% to $7.96.
- All-in sustaining cash costs per silver equivalent ounce sold decreased by 23% to $10.41.
- Revenues reported - IFRS decreased 18% to $13.7 million.
- Sales of 204,947 ounces of silver, another quarterly record, were up 35%.
- Sales of 7,522 ounces of gold were down 5%.
- Realized metal prices for ounces sold - silver price fell 31% to $22/oz and gold price fell 21% to $1,346/oz.
- Bullion inventory at September 30, 2013, included 53,131 ounces of silver and 1,819 ounces of gold.
- Net earnings amounted to $3.71 million ($0.03 per share), compared to $1.26 million ($0.01 per share).
- Cash and cash equivalents totaled $24.1 million (at September 30, 2013) after capital investments of $14.4 million.
- Working capital was $30.9 million at September 30, 2013.
The company is also nearing completion of a construction and expansion plan at Santa Elena. This includes the installation of a 3,000 TPD mill, which is 90% complete. The new processing facility has the potential to increase annual metal production to approximately 3-4 million ounces silver equivalent per year for the life of the mine. The new mill is scheduled to start in late Q1 2014.
The company is also constructing an underground decline that will access the deposit below the open pit. The total underground development has progressed to 2,265 metres as of December 31, 2013.
CEO Scott Drever said, "We look forward to a banner year in 2014 with the commissioning of the new processing facility in Q1 2014 and the expansion of our annual metals production to an estimated 3.3 to 3.5 million ounces of silver equivalent (55:1 Ag:Au)."
According to Jennings Capital: "SilverCrest is among a select group of juniors with the track record and asset base necessary to push it to the ranks of mid-tier producers." (See article here)
In an analyst note written on January 27th, Stuart McDougall of Jennings Capital wrote, "Management is already nearing the finish line on a capital redevelopment program aimed at doubling annual silver production rates at its Santa Elena mine. By year-end, we expect it to follow this up by outlining a clear path to a further doubling of production by way of the advanced La Joya project."
SilverCrest also owns 100% of the La Joya Project, a copper-silver-gold project in Durango State, Mexico. Last year the company released a PEA on La Joya showing potential to produce 2.1 million ounces of silver and 10.3 million pounds of copper over nine years at a cash cost of $10 per ounce of silver equivalent in the first three years.
McDougall has given the company a Buy recommendation with a one-year target price of $3.00 per share.
This is definitely one miner that you should be watching.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in SVLC over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.