Silver X Reports Third Quarter 2023 Financial Results
SILVER X MINING CORP.
Suite 1012 – 1030 West Georgia Street | Vancouver, BC | V6E 2Y3
Silver X Reports Third Quarter 2023 Financial Results
Vancouver, BC, November 2 9, 2023 — Silver X Mining Corp. (TSX-V: AGX) (OTCQB: AGXPF) (F:AGX) (“Silver X” or
the “Company”), a rapidly expanding silver developer and producer in Central Peru, is pleased to report its interim
financial results for the nine months ended September 30, 2023 (“Q3 2023”) for the Nueva Recuperada Project (the
“Project”) in Central Peru.
Third Quarter 2023 Highlights
• Silver X placed operations temporarily on hold to launch an operational upgrade on July 26, 2023, and
resumed operations on September 19, 2023 with the aim of revisiting the Project plan and streamline
production
• Since the announcement on September 19, 2023, the Company has successfully processed 230,444
ounces of silver equivalent (“ oz AgEq”) in just 45 days, with an average head grade of 304.25 g AgEq/t
(9.71 oz AgEq/t).
• Generated revenues of $2.1 million compared $4.7 million in Q3 2023 and $5.5 million quarter ended
September 30, 2022 (“Q3 2022”).
• Operating loss of $0.8 million compared with an operating gain of $2.0 million in Q3 2022.
• Net loss before tax of $2.3 million compared with a net loss of $4.9 million in Q3 2022.
• Cash costs of $2 2.01 per Silver Equivalent (“ AgEq”) ounce produced (1)(2) and All -In-Sustaining Cost
(“AISC”) (1)(2) of $33.45 per AgEq ounce produced, reflective of the sustaining capital expenditure invested
in the development of the Tangana mining unit ($1.3 million adding $11.44 per AgEq ounce produced to
the AISC).
• During the three months ended September 30, 2023, the Company completed its operational hold between
July 26, 2023 to September 19, 2023 to implement a strategic operational reset. During the brief pause,
operational upgrades were successfully completed and are expected to enhance efficiency and profitability,
including investment in equipment upgrades, workforce training, and safety measures. As a result of this
pause, revenues and production metrics decreased while cost per unit increased during the quarter.
Commenting on the third quarter 2023 results, José M. García, CEO of Silver X, commented, "Throughout the
quarter, we faced an un foreseen decline in grades within c ertain mineralized zones, resulting in a reduction in
metal output and impacting our bottom line financial performance. We have re -evaluated our mine plan and
strengthened our collaboration with our main contractor to enhance our short -term performance. I am pleased
to announce the resumption of our operations on September 19, 2023 , and I am highly confident that these
adjustments will contribute to the transformation of the Nueva Recuperada Project into one of the most attractive
silver districts in the region."
Notes:
1. Cash costs per AgEq ounce produced and AISC per AgEq ounce produced are non -IFRS financial ratios. These are based on non -
IFRS financial measures that do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable
to other issuers. Please refer to the “Non-IFRS Measures” section of this news release for further information.
2. AgEq ounce produced was calculated using the average sales prices of each metal for each month, and revenues from concentrate
sales does not consider metallurgical recoveries in the calculations as the metal recoveries are built into the sales amounts.
Events Subsequent to the End of the Quarter
• On October 3, 2023, the Company announced the the appointment of Mr. Jason Tong as Chief Financial
Officer (“CFO”) of Silver X Mining Corp. effective October 1st, 2023.
• On November 16, 2023, the Company announced a 12-year extension of its social agreement with the
local Huachocolpa (Huancavelica, Peru) community, solidifying relations and enabling continued
operations at the Project until November 2035.
• On November 28, 2023, Silver X and Maverix Metals Inc. (“ Maverix”), a subsidiary of Triple Flag
Precious Metals Corp. (“ Triple Flag”), entered into an agreement amending the terms of the original
royalty agreement between the parties to, among other things, expand the royalty to cover the entire
Tangana Mining Unit (the “Mine”) in the Project. This strategic restructuring results in gross proceeds
of US$2.42 million.
Summary of Selected Financial Results
The information provided below are excerpts from the Company’s unaudited interim Financial Statements and
Management’s Discussion and Analysis (“ MD&A”), which can be found on the Company’s website at
www.silverxmining.com or on SEDAR+ at www.sedarplus.com.
For the three months ended For the nine months ended
Sept 30,
2023
Sept 30,
2022
Change
%
Sept 30,
2023
Sept 30,
2022
Change
%
Operating Revenues $ 2,089,879 $ 5,497,311 -62% $ 11,319,147 $ 9,989,934 13%
Cost of Sales (2,901,377) (3,499,658) -17% (12,935,514) (10,165,287) 27%
Operating loss $ (811,498) $ 1,997,653 -141% $ (1,616,367) $ (175,353) 822%
Exploration Expenditures (82,625) (23,917) 245% (234,289) (203,595) 15%
General and Administrative expenses (562,434) (1,327,959) -58% (2,346,398) (3,125,873) -25%
Other items (890,729) (101,236) 780% (654,974) (399,836) 64%
Net loss before tax $ (2,347,286) $ 544,541 -531% $ (4,852,028) $ (3,904,657) 24%
Deferred income tax recovery (expense) 230,000 (359,000) -100% 620,000 1,561,000 -75%
Net loss $ (2,117,286) $ 185,541 -1365% $ (4,232,028) $ (2,343,657) 90%
Gain (Loss) on translation of foreign
operations
617,667
(1,122,628) -155%
276,514
(589,948) -147%
Total comprehensive loss $ (1,499,619) $ (937,087) 85% $ (3,955,514) $ (2,933,605) 43%
Shareholders
-1177%
54% Loss per share, basic and diluted $ (0.01) $ 0.00 $ (0.03) $ (0.02)
EBITDA (1) $ (1,744,999) $ 912,604 -291% $ (2,847,996) $ (2,923,618) -3%
Adjusted EBITDA (1) (969,998) 1,368,766 -171% (2,533,049) (2,341,655) 8%
Adjusted EBITDA per share (1) (0.006) 0.010 -160% (0.016) (0.018) -12%
Note:
1. EBITDA, Adjusted EBITDA and Adjusted EBITDA per share are non-IFRS ratios with no standardized meaning under IFRS, and therefore
may not be comparable to similar measures presented by other issuers. For further information, including detailed reconciliations to the
most directly comparable IFRS measures, see "Non-IFRS Measures" in this news release and the MD&A.
For the nine months ended September 30, 2023, the Company recorded:
• Net loss before tax of $2.3 million, compared to a net income before tax of $0.5 million in Q3 2022.
• EBITDA loss of $1.7 million, compared to an EBITDA income of $1.4 million in Q3 2022.
• Adjusted EBITDA loss of $1.0 million, compared to an Adjusted EBITDA income of $1.4 million in Q3 2022.
The loss in the current period was primarily due to decrease in operating revenues from the sale of mineral
production of $2.1M compared to $ 5.5M in the prior year ( decrease of $ 3.4M), offset by cost of sales of $ 2.9M
compared to $ 3.5M in the prior year (decrease of $ 0.6M), resulting in a operating loss of $0.8M compared to a
operating gain of $2.0M in the prior period. The decrease in revenues and the operating loss was due to the Company
placing the operations on hold between July 26, 2023 to September 19, 2023 to implement a strategic operational
reset. The Company also had a foreign exchange loss of $0.8M compared to a foreign exchange gain of $51K in the
comparative period.
Loss or gain in translation of foreign operations fluctuates depending on the strength of the Peruvian sol and
Canadian dollar against the US dollar. A relative appreciation of the sol or CAD against USD will result in gains in
translation of foreign operations, and vice versa.
Financial Position
Q3 2023 Q4 2022 Change %
Cash 613,377 1,023,979 -40%
Current assets 6,260,733 6,418,921 -2%
Total assets 68,670,721 66,274,464 4%
Current liabilities 21,270,703 17,031,916 25%
Non-current liabilities 10,791,969 10,875,237 1%
Total liabilities 32,062,672 27,907,153 16%
Total shareholders' equity 36,378,049 38,367,311 -5%
The available cash during the period decreased by $0. 4 million reflecting the net outflow from its continuing
development of the Tangana mine unit, which saw higher development rates during the period. This was offset
by the Company’s non-brokered private placement of net proceeds of $1.8M completed during the period. The
Company continues to actively manage the existing payables either through the cash flow generated from the
operations and/or through other available sources of financing to further improve its working capital.
Cash provided by operating activities for nine months ended September 30, 2023, was $1.6M compared to $2.4M
cash used in operating activities for the nine months ended September 30, 2022. The cash inflow in the current
period was due to increased production at the Company’s mining operations.
Cash provided by financing activities during the nine months ended September 30, 2023, was $1.8M compared to
$0.2M cash used during the nine months ended September 30, 2022, primarily due to non-brokered private
placement offerings during the current period of net proceeds of $1.9M.
Cash used in investing activities during the nine months ended September 30, 2023, was higher at $4.1M compared
to $1.4M cash used during the nine months ended September 30, 2022, as the Company continued to invest in the
development of the Tangana mining unit.
Operational Results
For the three months ended For the nine months ended
Unit September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Ore mined tonnes 14,065 28,457 79,900 56,583
Ore processed tonnes 15,826 31,049 91,489 63,329
Average head grades
Silver g/t 79.71 68.43 61.74 76.91
Gold g/t 1.10 3.13 1.06 1.06
Zinc % 1.32 1.29 1.63 1.38
Lead % 1.54 1.40 1.57 1.53
Average AgEq head grades g/t 282 482 275 283
Average AgEq head grades oz/t 9.07 15.49 8.83 9.10
Average recoveries
Silver % 89% 87% 88% 87%
Gold % 78% 78% 69% 68%
Zinc % 80% 83% 82% 79%
Lead % 88% 88% 88% 88%
Metal processed
Silver oz 38,906 68,311 178,061 151,724
Gold oz 550 3,128 3,083 4,226
Zinc lbs 412,183 881,740 3,174,536 1,897,277
Lead lbs 503,473 957,521 3,077,455 2,046,384
AgEq processed (2) oz 136,992 481,040 792,213 798,855
Metal produced
Silver oz 36,149 59,734 160,525 132,505
Gold oz 437 2,197 2,221 2,789
Zinc lbs 368,524 770,368 2,696,095 1,579,627
Lead lbs 473,820 845,016 2,789,262 1,812,157
AgEq produced (2) oz 117,538 371,072 648,637 591,072
For the three months ended For the nine months
ended
Unit September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Metal sold
Silver oz 36,338 55,260 160,230 122,228
Gold oz 394 2,205 2,271 3,197
Zinc lbs 316,899 683,011 2,678,678 1,503,294
Lead lbs 426,521 796,837 2,774,677 1,769,030
AgEq sold (1) oz 101,701 342,841 609,156 552,353
Average realized price (3)
Silver $/oz 23.59 19.31 23.44 20.71
Gold $/oz 1,931 1,693 1,925 1,733
Zinc $/lbs 1.11 1.47 1.27 1.58
Lead $/lbs 0.99 0.90 0.97 0.94
Cash cost per AgEq ounce
produced (1)
$/oz 22.0 11.0 20.0 21.1
AISC per AgEq ounce produced (1) $/oz 33.5 15.8 29.0 30.2
Notes:
1. Average Realized Price, production cost per tonne processed, AgEq sold, cash cost per AgEq ounce produced and AISC per AgEq ounce produced
are non-IFRS ratios with no standardized meaning under IFRS, and therefore may not be comparable to similar measures presented by other issuers.
For further information, including detailed reconciliations to the most directly comparable IFRS measures, see "Non -IFRS Measures" in this news
release and the MD&A.
2. AgEq ounces processed and produced were calculated based on all metals processed and produced using the average sales prices of each metal
for each month during the period. Revenues from concentrate sales does not consider metallurgical recoveries in the calculati ons as the metal
recoveries are built into the sales amounts.
3. Average realized price corresponds to the average prices for each metal on the following month after delivery, used to calculate the final value of
the concentrate delivered in a given month before any deductions.
Non-IFRS Measures
The Company has included certain non-IFRS financial measures and ratios in this news release, as discussed below.
The Company believes that these measures, in addition to measures prepared in accordance with IFRS, provide
investors an improved ability to e valuate the underlying performance of the Company. The non -IFRS measures
and ratios are intended to provide additional information and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with IFRS. These financial measures and ratios do
not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers.
Cash Costs, All-In Sustaining Cost, EBITDA and Adjusted EBITDA
The Company uses cash costs, cash cost per AgEq ounce produced, AISC, AISC per AgEq ounce produced, EBITDA
and Adjusted EBITDA to manage and evaluate its operating performance in addition to IFRS measure because the
Company believes that conventional measures of performance prepared in accordance with IFRS do not fully
illustrate the ability of its operations to generate cash flows. The Company understands that certain investors
use these measures to determine the Company’s ability to generate earnings and cash flows for use in investing
and other activities. Management and certain investors also use this information to evaluate the Company’s
performance relative to peers who present this measure on a similar basis.
Cash costs is calculated by starting with cost of sales, and then adding treatment and refining charges, and changes
in depreciation and amortization.
Total cash production costs include cost of sales, changes in concentrate inventory, changes in amortization, less
transportation and other selling costs and royalties. Cash costs per AgEq ounce produced is calculated by dividing
cash costs by the AgEq ounces produced.
AISC and AISC per AgEq ounce produced are calculated based on guidance published by the World Gold Council
(and used as a standard of the Silver Institute). The Company presents AISC on the basis of AgEq ounces produced.
AISC is calculated by taking the cash costs and adding sustaining costs. Sustaining costs are defined as capital
expenditures and other expenditures that are necessary to maintain current production. Management has
exercised judgment in making this determination.
The following table reconciles cash costs, cash costs per AgEq ounce, AISC and AISC per AgEq ounce produced to
cost of sales, the most directly comparable IFRS measure:
For the three months ended For the nine months ended
September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Cost of sales $ 2,901,377 $ 3,499,658 $ 12,935,514 $ 10,165,287
Changes in concentrate inventory (99,166) 147,733 (258,328) 26,074
Royalties (71,220) (156,604) (346,773) (336,245)
Transportation and other selling costs (30,918) (84,284) (191,522) (160,195)
Amortization (478,461) (215,656) (1,505,947) (473,287)
Total cash production costs $ 2,221,613 $ 3,190,847 $ 10,632,945 $ 9,221,634
Royalties 71,220 156,604 346,773 336,245
Transportation and other selling costs 30,918 84,284 191,522 160,195
Treatment and refining charges and penalties 263,401 645,851 1,818,288 1,387,523
Total cash costs (A) $ 2,587,151 $ 4,077,586 $ 12,989,527 $ 11,105,597
General and administrative (incl. share
based compensation) (1) 548,700 1,327,959 2,012,348 3,125,873
Operating lease payments
80,871 77,871 237,613 233,613
Accretion and Amortization of
Reclamation Cost 20,601 14,566 61,803 42,792
Sustaining Capital Expenditure:
Development 620,775 73,047 3,462,779 614,663
Purchase of PP&E 73,874 300,963 78,739 806,526
Sustaining costs (B) $ 1,344,822 $ 1,794,406 $ 5,853,282 $ 4,823,467
All-In-Sustaining costs (A+B)
$ 3,931,973
$ 5,871,991
$ 18,842,809
$ 15,929,064
Note:
1. Nine months period ended September 30, 2023 excludes $ 320K of evaluation costs related to the Revenues-Virginius Mine M&A project in Ouray County,
Colorado.
During the period, the cash cost was commensurate with the decreased level of tonnage of ore processed, which
amounted to 15,826 tonnes (31,049 tonnes in Q3 2022). This resulted in lower production and sales volumes
during the quarter. The Company incurred $0. 3 million in treatment and refining charges ($0. 7 million in Q 3
2022).
As part of the cost reduction efforts deployed across the Company, the general and administrative expenses saw a
reduction of $0.8 million during the quarter when compared to Q3 2022.
The capital expenditure deployed in the development of the Tangana mining unit during the quarter of $1.3 million
was the main cost contributor to the AISC (vs. $1.8 million in Q2 2022). The sustained investment within the mine
development will enable the Company to access new production fronts and transition to higher head grades areas.
The following table reconciles the Net Loss to the EBITDA and Adjusted EBITDA:
For the three months ended For the nine months ended
September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
Net Loss $ (2,117,286) $ 185,541 $ (4,432,028) $ (2,343,657)
Deferred income tax recovery (230,000) 359,000 (620,000) (1,561,000)
Finance cost 123,826 152,407 498,085 507,752
Amortization 478,461 215,656 1,505,947 473,287
EBITDA $ (1,744,999) $ 912,604 $ (2,847,996) $ (2,923,618)
Foreign exchange (gain) loss 766,941 (51,286) 162,350 (103,913)
Share-based payments 8,060 507,448 152,597 685,876
Adjusted EBITDA $ (969,998) $ 1,368,766 $ (2,533,049) $ (2,341,655)
Adjusted EBITDA per share $ (0.006) $ 0.010 $ (0.016) $ (0.018)
The following table shows the calculation of the cash costs and AISC per AgEq ounce produced:
For the three months ended For the nine months ended
September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
AgEq ounces produced 117,538 371,072 648,637 591,072
Totals:
Cash costs $ 2,587,151 $ 4,077,586 $ 12,989,527 $ 11,105,597
Sustaining costs 1,344,822 1,794,406 5,853,282 4,823,467
All-In-Sustaining costs $ 3,931,973 $ 5,871,991 $ 18,842,809 $ 15,929,064
Per AgEq ounces produced:
Cash costs $ 22.01 $ 10.99 $ 20.03 $ 21.05
Sustaining costs 11.44 4.84 9.02 9.14
All-In-Sustaining costs $ 33.45 $ 15.82 $ 29.05 $ 30.19
Production Cost Per Tonne Processed
A reconciliation between production cost per tonne (excluding amortization and changes in inventories) and the
cost of sales is provided below. Changes in inventories are excluded from the calculation of Production Cost per
Tonne Processed. Changes in inventories reflect the net cost of concentrate inventory (i) sold during the current
period but produced in a previous period or (ii) produced but not sold in the current period. The Company uses
Production Cost Per Tonne Processed to evaluate its operating performance in addition to IFRS measure because
Company believes that conventional measures of performance prepared in accordance with IFRS do not fully
illustrate the ability of its operations to generate cash flows. Management and certain investors also use this
information to evaluate the Company’s performance relative to peers who present this measure on a similar
basis.
For the nine months ended For the nine months ended
September
30, 2023
September
30, 2022
September
30, 2023
September
30, 2022
Cost of Sales $ 2,901,377 $ 3,499,658 $ 12,935,514 $ 10,165,287
Adjustments - increase/(decrease):
Amortization (478,461) (215,656) (1,505,947) (473,287)
Changes in inventories (99,166) 147,733 (258,328) 26,074
Production cash costs (excluding
inventory adjustments) $ 2,323,750 $ 3,431,735 $ 11,171,239 $ 9,718,074
Tonnes processed 15,826 31,049 75,663 63,329
Production cash cost per tonne processed $/t 147 $/t 111 $/t 148 $/t 153
Average Realized Price
Average realized price is a non -IFRS financial measure. The Company uses "average realized price per ounce of
silver”, "average realized price per ounce of gold”, "average realized price per ounce of zinc” and "average realized
price per ounce of lead” because it understands that in addition to conventional measures prepared in accordance
with IFRS, certain investors and analysts use this information to evaluate the Company’s performance as
compared with “average market prices” of metals for the period.
Average realized metal prices represent the sale price of the metal. Average realized price corresponds to the
average prices for each metal on the following month after delivery, used to calculate the final value of the
concentrate delivered in a given month before any deductions:
For the three months ended For the nine months ended
September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Silver
Gross revenue $ 857,087 1,067,098 3,755,942 2,531,706
Metal sold oz 36,338 55,260 160,230 122,228
Average realized price $/oz 23.6 19.3 23.4 20.7
Gold
Gross revenue $ 761,353 3,732,575 4,372,236 5,541,692
Metal sold oz 394 2,205 2,271 3,197
Average realized price $/oz 1,931 1,693 1,925 1,733
Zinc
Gross revenue $ 351,950 1,004,862 3,395,432 2,381,942
Metal sold lbs 316,899 683,011 2,678,678 1,503,294
Average realized price $/lbs 1.11 1.47 1.27 1.58
Lead
Gross revenue $ 423,611 716,731 2,689,717 1,668,418
Metal sold lbs 426,521 796,837 2,774,677 1,769,030
Average realized price $/lbs 0.99 0.90 0.97 0.94
Cautionary Note regarding Production without Mineral Reserves
The decision to commence production at the Nueva Recuperada Project and the Company's ongoing mining
operations as referenced herein (the "Production Decision and Operations") are based on economic models
prepared by the Company in conjunction with management's knowledge of the property and the existing estimate
of measured, indicated and inferred mineral resources on the property. The Production Decision and Operations
are not based on a preliminary economic assessment, a pre -feasibility study or a feasibility study of mineral
reserves demonstrating economic and technical viability. Accordingly, there is increased uncertainty and economic
and technical risks of failure associated with the Production Decision and Operations, in particular: the risk that
mineral grades will be lower than expected; the risk that additional construction or ongoing mining operations are
more difficult or more expensive than expected; and production and economic variables may vary considerably, due