Guanajuato Silver Announces Q2 2022 Financial and Operating Results ~ Q2 Production of 337,760 Silver Equivalent ounces ~
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Guanajuato Silver Announces Q2 2022 Financial and Operating Results
~ Q2 Production of 337,760 Silver Equivalent ounces ~
August 24, 2022 – Vancouver, British Columbia – Guanajuato Silver Company Ltd. (the “Company” or
“GSilver”) (TSXV:GSVR)(OTCQX:GSVRF) is pleased to announce financial and operating results for the
three months ended June 30, 2022. All dollar amounts are expressed in US dollars ($). Production
results are from the Company’s wholly owned El Cubo Mine Complex (“El Cubo”) and El Pinguico (“El
Pinguico”) project in Guanajuato, Mexico.
“Month over month improvements in precious metals production, recoveries, and tonnes milled
during Q2 were the hallmarks of a positive trend that we see continuing through the remainder of the
year as we complete the ramp-up phase at El Cubo,” said James Anderson, Chairman and CEO of
Guanajuato Silver. “We remain on-track to accomplish all of our original objectives at El Cubo as we
now look to our Mexican operations teams to mirror the same success at our newly acquired mining
assets of San Ignacio, Valenciana, and Topia, where production activities have already begun; the
details of which will be discussed in a subsequent news release.”
Q2 2022 - Demonstrating Month over Month Operations Improvements
Second quarter 2022
April May June
Operating
Tonnes milled 29,384 31,813 33,015
Silver ounces produced 49,275 51,921 54,716
Gold ounces produced 721 711 729
Silver equivalent (“Ag/Eq”) oz produced (1) 108,815 111,965 116,979
Average silver recovery (%) 79.7 81.0 81.9
Average gold recovery (%) 80.8 83.1 83.5
1. Silver equivalents are calculated using an average of 83.4:1 (Ag/Au) ratio for the second quarter of 2022.
Q2 2022 Selected Highlights
• Increasing production: 155,912 ounces (oz) of silver and 2,161 oz of gold for 337,760 oz silver
equivalent (Ag/Eq)1, representing a 22% increase over Q1.
• Milled tonnage increasing with significant capacity still available: In Q2, 94,212 tonnes were
milled at El Cubo; the average rate for the quarter was approximately 30,000 tonnes per month,
which is well below El Cubo’s maximum milling capacity of over 45,000 tonnes per month.
Therefore, El Cubo has abundant capacity available to accommodate mineralized material from
the recently purchased San Ignacio and Valenciana Mines Complex (See GSilver news release
dated August 4, 2022 – GSilver Closes Acquisition of Great Panther’s Mexican Mining Assets).
• Cash cost per AgEq ounce produced continues to improve: Cash costs2 were 16% lower in Q2 at
$16.98 compared to $20.12 for Q1, 2022. This result was in-line with expectations; improving
costs per AgEq ounce produced is primarily due to increasing optimization of operations at the
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Villalpando and Santa Cecilia mine areas of El Cubo. AISC per AgEq ounce produced was also
lower by 6%, which was also in-line with Company projections.
• Revenue marginally lower: Q2 revenue of $6,133,989 was 4% lower compared to Q1; this was
largely reflective of a 6% decrease in silver prices over the same period.
Three Months Ended
June 30
2022
March 31
2022
Dec 31
2021
Change
Q2 vs
Q1
Change
Q1-22 vs
Q4-2021
Production
Tonnes mined 90,045 81,338 89,082 11% (9%)
Tonnes milled 94,212 86,288 77,524 9% 11%
Silver ounces produced 155,912 125,423 124,750 24% 1%
Gold ounces produced 2,161 1,880 1,440 15% 31%
Silver equivalent (“Ag/Eq”) oz
produced (1) 337,760 275,823 235,609 22% 17%
Cost per tonne (2) 61.22 64.70 63.35 (5%) 2%
Cash cost per Ag/Eq ounce (1)(2) 16.98 20.12 20.36 (16%) (1%)
AISC per Ag/Eq ounce (1)(2) 24.06 25.67 33.31 (6%) (23%)
Financial $ $ $
Revenue 6,133,989 6,386,638 4,116,811 (4%) 55%
Cost of Sales 7,790,285 8,123,761 6,350,863 (4%) 28%
Mine operating loss (1,656,296) (1,737,123) (2,234,052) (5%) (22%)
Net loss (3,521,391) (4,939,152) (4,746,245) (29%) 4%
EBITDA (2) (1,130,710) (2,503,405) (2,858,086) (55%) (12%)
Silver ounces sold 159,840 134,281 105,203 19% 28%
Gold ounces sold 2,195 2,007 1,179 9% 70%
Ag/Eq ounces sold (1) 342,987 294,842 199,526 16% 48%
Realized silver price per oz (2) (3) 22.56 23.97 23.35 (6%) 3%
Realized gold price per oz(2) (3) 1,873.26 1,864.26 1,784.02 >1% 4%
Working capital (2) (2,046,261) (1,198,721) 1,670,108 (71%) (172%)
Shareholders
Loss per share - basic and diluted $(0.02) $(0.02) $(0.02) (0%) (0%)
Weighted Average Shares
Outstanding 226,033,272 224,556,314 210,531,741 1% 7%
1. Silver equivalents are calculated using an 83.4:1 (Ag/Au) ratio for Q2 2022 and 80:1 for Q1 2022 and Q4 2021
respectively.
2. The Company reports non-IFRS performance measures which include cash costs per silver equivalent ounce produced,
all-in sustaining cost per silver equivalent ounce produced, total production cost per tonne, realized silver price per
ounce sold, realized gold price per ounce sold, working capital and EBITDA. These measures are widely used in the
mining industry as a benchmark for performance, but do not have a standardized meaning under IFRS and the methods
used by the Company to calculate such measures may differ from methods used by other companies with similar
descriptions. For a complete description of how the Company calculates such measures and a reconciliation of certain
measures to IFRS terms please see the applicable description in the Company's management discussion and analysis
for the three months ended June 30, 2022, filed on SEDAR at www.sedar.com.
3. Based on provisional sales before final price adjustments, before payable metal deductions, treatment, and refining
charges.
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The complete interim financial statements and management’s discussion & analysis for the three
months ended June 30, 2022, can be viewed on SEDAR at www.sedar.com and at the Company`s
website at gsilver.com.
Technical Information
Hernan Dorado Smith, a director and officer of GSilver and a "qualified person" as defined by National
Instrument 43 -101, Standards of Disclosure for Mineral Projects, has approved the scientific and
technical information contained in this news release.
About Guanajuato Silver
GSilver is a precious metals producer engaged in reactivating past producing silver and gold mines
near the city of Guanajuato, Mexico, which has an established 480-year mining history. With five
mines and three processing facilities, the Company is one of the fastest growing silver producers in
Mexico.
ON BEHALF OF THE BOARD OF DIRECTORS
"James Anderson"
Chairman and CEO
For further information regarding Guanajuato Silver Company Ltd., please contact:
JJ Jennex, Gerente de Comunicaciones, T: 604 723 1433
Gsilver.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
Forward-Looking Statements
This news release contains certain forward-looking statements and information, which relate to future events or
future performance including, but not limited to, the current and projected mined output from the Company’s
existing El Cubo and El Pinguico mines and newly acquired San Ignacio, Valenciana and Topia mines, and GSilver’s
anticipated performance for the balance of 2022, the ability of the Company to continue to increase production,
tonnage and recoveries of mineralized material at El Cubo and El Pinguico in accordance with its objectives and
timetable and to mirror such performance at San Ignacio, Valenciana and Topia; the ability of the Company to
increase silver and gold grades, improve metallurgical recovery rates, increase revenues, and reduce production
costs (including AISC) consistent with the Company’s expectations and production model, the Company’s ability
to restart production from the San Ignacio and Valenciana mines and improve efficiency and output at the Topia
mine as currently planned and the timing thereof, the Company’s future development and production activities;
estimates of mineral resources and mineralized material at the Company’s mining projects and the accessibility,
attractiveness, mineral content and metallurgical characteristics thereof; the opportunities for future
exploration, development and production at the Company’s mines and th e proposed exploration, development
and production programs therefor and the timing and costs thereof; and the success related to any future
exploration, development and/or production programs.
Such fo rward -looking statements and information reflect management's current beliefs and are based on
information currently available to and assumptions made by the Company; which assumptions, while considered
reasonable by the Company, are inherently subject to significant operational, business, economic and regulatory
uncertainties and contingencies. These assumptions include: our mineral resource estimates at El Cubo and El
Pinguico and estimates of mineralized material at San Ignacio, Valenciana and Topia and the assumptions upon
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which they are based, including geotechnical and metallurgical characteristics of rock conforming to sampled
results and metallurgical performance; available tonnage of mineralized material to be mined and processed;
resource grades and recoveries; assumptions and discount rates being appropriately applied to production
estimates; the ability of the Company to successfully integrate production from San Ignacio and Valenciana into
the Company’s existing mining and milling operations at El Cubo and the availability of excess processing and
tailings capacity at El Cubo to accommodate same; the Company’s ability to secure additional sources of
mineralized material for processing, prices for silver, gold and other metals remaining as estimated;
currency exchange rates remaining as estimated; availability of funds for the Company's projects and to satisfy
current liabilities and obligations including debt repayments; capital, decommissioning and reclamation
estimates; prices for energy inputs, labour, materials, supplies and services (including transportation) and
inflation rates remaining as estimated; no labour-related disruptions; no unplanned delays or interruptions in
scheduled construction and production; all necessary permits, licenses and regulatory approvals are received in
a timely manner; and the ability to comply with environmental, health and safety laws. The foregoing list
of assumptions is not exhaustive.
Readers a re cautioned that such forward-looking statements and information are neither promises nor
guarantees, and are subject to risks and uncertainties that may cause future results, level of activity, production
levels, performance or achievements of GSilver to differ materially from those expected including, but not limited
to, market conditions, availability of financing, currency rate fluctuations, rising inflation and interest rates,
geopolitical conflicts including wars, actual results of exploration, development and production activities, actual
resource grades and recoveries of silver, gold and other metals, availability of third party mineralized material
for processing, unanticipated geological or structural formations and characteristics, environmental risks, future
prices of gold, silver and other metals, operating risks, accidents, labor issues, equipment or personnel delays,
delays in obtaining governmental or regulatory approvals and permits, inadequate insurance, and other risks in
the mining industry. There are no assurances that GSilver will be able to continue to increase production, tonnage
milled and recoveries rates, improve grades and reduce costs at El Cubo and/or Topia to process mineralized
materials to produce silver, gold and other concentrates in the amounts, grades, recoveries, costs and timetable
anticipated. In addition, GSilver’s d ecision to process mineralized material from El Cubo, El Pinguico and its newly
acquired San Ignacio, Valenciana and Topia mines is not based on a feasibility study of mineral reserves
demonstrating economic and technical viability and therefore is subject to increased uncertainty and risk of
failure, both economically and technically. Mineral resources and mineralized material that are not Mineral
Reserves do not have demonstrated economic viability, are considered too speculative geologically to have the
economic considerations applied to them, and may be materially affected by environmental, permitting, legal,
title, socio-political, marketing, and other relevant issues. There are no assurances that the Company's projected
production of silver, gold and other metals will be realized. In addition, there are no assurances that the
Company will meet its production forecasts or generate the anticipated cash flows from operations to satisfy its
scheduled debt payments or other liabilities when due or meet financial covenants to which the Company is
subject or to fund its exploration programs and corporate initiatives as planned. There is also uncertainty about
the continued spread and severity of COVID-19, the ongoing war in Ukraine and rising inflation and interest rates
and the impact t hey will have on the Company's operations, supply chains, ability to access mining projects or
procure equipment, contractors and other personnel on a timely basis or at all and economic activity in general.
Accordingly, readers should not place undue reliance on forward-looking statements or information. All forward-
looking statements and information made in this news release are qualified by these cautionary statements and
those in our continuous disclosure filings available on SEDAR at www.sedar.com including the Company’s interim
financial statements and accompanying MD&A for the three month period ended June 30, 2022. These forward-
looking statements and information are made as of the date hereof and the Company does not assume any
obligation to update or revise them to reflect new events or circumstances save as required by law.