Guanajuato Silver Reports Q2 2023 Financial and Operating Results ~ Q2 Production of Over 941,338 AgEq Ounces ~
Guanajuato Silver Reports Q2 2023 Financial and Operating Results
~ Q2 Production of Over 941,338 AgEq Ounces ~
Aug 25, 2023 – Vancouver, British Columbia – Guanajuato Silver Company Ltd. (the “Company” or “GSilver”)
(TSXV:GSVR)(AQUIS:GSVR)(OTCQX:GSVRF) is pleased to announce financial and operating results for the six
months ended June 30, 2023. All dollar amounts are in US dollars (US$) and prepared in accordance with
International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.
Production results are from the Company’s wholly owned El Cubo Mines Complex (“El Cubo”), Valenciana Mines
Complex (“VMC”) and San Ignacio mine (“San Ignacio”) in Guanajuato, Mexico, and the Topia mine ("Topia")
located in Durango, Mexico.
James Anderson, Chairman & CEO of Guanajuato Silver, said, “Over the past twelve months we have made great
strides in bringing our newly purchased mining assets back into optimal production. Significant infrastructure
investments made since August of last year include: the rehabilitation of the Cata shaft; the installation of a new
locomotive haulage system and the establishment of an environmentally superior tailings backfill system at
VMC; the installation of new Falcon concentrators at both of our Guanajuato processing facilities; and the
development of new mining areas at Santa Cecilia, San Ignacio, and Topia. These capex investments are now
poised to deliver improved efficiencies as we head into the second half of the year. The ramp-up at our four
producing silver mines remains on schedule; however, our business is not immune to inflationary pressures and
extraordinary currency market volatility – most notably the remarkable rise of the Mexican peso, which has
appreciated approximately 20% against the US dollar over the past year. Our Q2 cash flows have been impacted
as approximately 75% of our expenditures are denominated in Mexican pesos; we have therefore implemented
a number of cost reductions, including some staff reductions, and will continue to prioritize cost controls going
forward.”
Q2 2023 Highlights
• Record production during the quarter of 941,338 AgEq (silver equivalent) ounces derived from 477,649
ounces of silver; 4,719 ounces of gold; 875,802 pounds of lead; and 897,258 pounds of zinc (see footnote
to table below for assumptions regarding the calculation of silver equivalents).
• Net loss narrowed by 2% in Q2 to $8.5M compared to $8.6M in Q1; revenue of $16.8M for the quarter
was down 2% compared to Q1.
• All-in sustaining cost (“AISC”) of $22.47 per AgEq ounce produced was slightly higher than $21.83 for
Q1 2023; operating costs were impacted by a strong Mexican currency; approximately 75% of operating
costs are denominated in Mexican pesos. Realized metal prices in Q2 were 8% higher for silver, 5%
higher for gold, 1% higher for lead, but notably 20% lower for zinc compared to Q1.
• Tonnes mined and milled increased 3% and 2% respectively from Q1 to Q2; over the quarter; a total of
166,171 tonnes were mined across the four producing silver mines, and a total of 163,793 tonnes were
milled.
• Silver and gold recoveries back to near-historical highs as newly installed Falcon concentrators
improved overall efficiency. Average silver and gold recoveries for Q2 were 84.9% and 83.1%
respectively, compared to Q1 average recovery for silver of 83.9% and 81.1% for gold.
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1. Silver equivalents are calculated using an 81.33:1 (Ag/Au), 0.04:1 (Ag/Pb) and 0.05:1 (Ag/Zn) ratio for Q2 2023, an
83.4:1 (Ag/Au) ratio for Q2 2022; an 82.51:1 (Ag/Au), 0.04:1 (Ag/Pb) and 0.06:1 (Ag/Zn) ratio for YTD 2023, an
82:22:1 (Ag/Au) ratio for YTD 2022, respectively and an 83.78:1 (Ag/Au), 0.04:1 (Ag/Pb) and 0.06:1 (Ag/Zn) ratio
for Q1 2023.
2. Cash cost per silver equivalent ounce include mining, processing, and direct overhead. See Reconciliation to IFRS
on page 31 of the interim MD&A.
3. AlSC per Ag/Eq oz include mining, processing, direct overhead, corporate general and administration expenses,
on-site exploration, reclamation and sustaining capital. See Reconciliation to IFRS on page 31 of the interim
MD&A.
4. Reconciliation of earnings before interest, taxes, depreciation, and amortization on page 30 of the interim MD&A.
5. See “Non-IFRS Financial Measures” on page 29 of the interim MD&A.
6. Based on provisional sales before final price adjustments, before payable metal deductions, treatment, and
refining charges.
7. Mine operating cash flow before taxes is calculated by adding back depreciation, depletion, and inventory write-
downs to mine operating loss. See Reconciliation to IFRS on page 29 of the interim MD&A.
This news release should be read in conjunction with the Company’s condensed interim consolidated financial
statements for the six-month period ended June 30, 2023 and related Management’s Discussion and Analysis
(“MD&A”) available at www.sedarplus.com.
Three months ended Six Months ended
Consolidated
June 30
2023
June 30
2022
%
Change
June 30
2023
June 30
2022
%
Change
March 31
2023
%
Change
Operating
Tonnes mined 166,171 90,045 85% 328,287 171,383 92% 162,116 3%
Tonnes milled 163,793 94,212 74% 323,975 180,500 79% 160,182 2%
Average silver recovery (%) 84.90 80.90 5% 84.41 78.00 8% 83.90 1%
Average gold recovery (%) 83.10 82.60 1% 82.15 79.90 3% 81.10 2%
Silver ounces produced 477,649 155,912 206% 936,452 281,335 233% 458,803 4%
Gold ounces produced 4,719 2,161 118% 9,132 4,041 126% 4,413 7%
Lead produced (lbs) 875,802 - 100% 1,782,498 - 100% 906,696 (3%)
Zinc produced (lbs) 897,258 - 100% 2,050,396 - 100% 1,153,138 (22%)
Silver equivalent (“Ag/Eq”) ounces produced (1) 941,338 337,760 179% 1,879,385 613,583 206% 938,047 0%
Silver ounces sold 462,917 159,840 190% 937,871 294,121 219% 474,954 (3%)
Gold ounces sold 4,427 2,195 102% 9,014 4,203 114% 4,586 (3%)
Lead sold (lbs) 830,567 - 100% 1,786,008 - 100% 955,441 (13%)
Zinc sold (lbs) 871,328 - 100% 2,113,717 - 100% 1,242,389 (30%)
Ag/Eq ounces sold (1) 901,474 342,987 163% 1,871,075 637,829 193% 969,603 (7%)
Cost per tonne ($) (5) 100.22 60.89 65% 99.20 62.53 59% 98.16 2%
Cash cost per Ag/Eq ounce ($) (1)(2)(5) 17.71 17.08 4% 17.39 18.50 (6%) 17.06 4%
AISC per Ag/Eq ounce ($) (1)(3)(5) 22.47 24.15 (7%) 22.15 24.89 (11%) 21.83 3%
Financial $ $ $ $ $
Revenue 16,823,042 6,133,989 174% 33,941,466 12,520,627 171% 17,118,424 (2%)
Cost of Sales 19,213,281 7,790,285 147% 39,482,397 15,914,046 148% 20,269,116 (5%)
Mine operating loss (2,390,239) (1,656,296) 44% (5,540,931) (3,393,419) 63% (3,150,692) (24%)
Mine operating cashflow before taxes (7) 394,276 7,923 4,877% 581,490 20,557 2,729% 187,214 111%
Net loss (8,557,538) (3,521,391) 143% (17,256,616) (8,460,543) 104% (8,699,078) (2%)
EBITDA(4)(5) (4,576,059) (1,132,279) 304% (8,643,467) (3,572,987) 142% (4,093,976) 12%
Adjusted EBITDA(4)(5) (3,409,928) (2,244,594) 52% (5,683,156) (4,138,726) 37% (2,299,797) 48%
-
Realized silver price per ounce (6) 24.33 22.56 8% 23.40 23.20 1% 22.50 8%
Realized gold price per ounce (6) 1,988.05 1,873.26 6% 1,938.47 1,868.96 4% 1,890.60 5%
Realized lead price per pound (6) 0.97 - 100% 0.97 - 100% 0.96 1%
Realized zinc price per pound (6) 1.14 - 100% 1.31 - 100% 1.42 (20%)
Working capital (5) (17,831,378) (2,046,261) 771% (17,831,378) (2,046,261) 771% (11,029,888) 62%
Shareholders
Loss per share – basic and diluted (0.03) (0.02) 31% (0.05) (0.04) 41% (0.03) (3%)
Weighted Average Shares Outstanding 327,386,045 226,033,272 45% 325,149,910 225,299,982 44% 322,849,823 1%
Three months ended
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About Guanajuato Silver
GSilver is a precious metals producer engaged in reactivating past producing silver and gold mines in central
Mexico. The Company produces silver and gold concentrates from the El Cubo Mine, Valenciana Mines
Complex, and the San Ignacio mine; all three mines are located within the state of Guanajuato, which has an
established 480 -year mining history. Additionally, the Company produces silver, gold, lead, and zinc
concentrates from the Topia mine in northwestern Durango. With four operating mines and three processing
facilities, Guanajuato Silver is one of the fastest growing silver producers in Mexico.
Technical Information
Reynaldo Rivera, VP of Exploration of GSilver, has approved the scientific and technical information contained
in this news release. Mr. Rivera is a member of the Australasian Institute of Mining and Metallurgy (AusIMM -
Registration Number 220979) and a "qualified person" as defined by National Instrument 43-101, Standards of
Disclosure for Mineral Projects.
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 ramp-up at the Company’s four producing silver mines remaining on
schedule; details regarding cost reductions and cost controls going forward; the ability of the Company to continue to
increase production, tonnage and recoveries of mineralized material at San Ignacio, Valenciana, El Cubo and Topia in
accordance with its objectives and timetable; the Company’s future development and production activities; and GSilver’s
status as one of the fasting growing silver mining company in Mexico.
Such forward-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: the potential quantity, grade and metal content of the mineralized material at
El Cubo, San Ignacio, VMC and Topia, the geotechnical and metallurgical characteristics of such material 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;
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 are 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
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achievements of GSilver to differ materially from those expected including, but not limited to, market conditions,
availability of financing, currency rate fluctuations, high 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 from the Company’s existing mines including El Cubo, San Ignacio, VMC and Topia, 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, San Ignacio, VMC 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 decision to process mineralized material from El Cubo, San Ignacio, VMC and
Topia 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 grades of gold and silver at El Cubo, San Ignacio, VMC and Topia and the anticipated level of production therefrom
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 high inflation and
interest rates and the impact they 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.sedarplus.com including the Company’s annual information form
for the fiscal year ended December 31, 2021. 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.