Guanajuato Silver Reports Year End 2023 Financial Results
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Guanajuato Silver Reports Year End 2023 Financial Results
April 8, 2024 – Vancouver, British Columbia – Guanajuato Silver Company Ltd. (the “Company” or “GSilver”)
(TSXV:GSVR)(AQUIS:GSVR)(OTCQX:GSVRF) is pleased to announce selected financial information and
consolidated production results for the year ended December 31, 2023. The Company’s consolidated
financial statements for the year ended December 31, 2023 and Management’s Discussion and Analysis
(“MD&A”) thereon can be viewed under the Company’s profile at www.sedarplus.com. All dollar amounts
are in US dollars (US$) and prepared in accordance with IFRS Accounting 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”) located
in Guanajuato, Mexico, and the Topia Mine (“Topia”) located in Durango, Mexico.
Selected 2023 Highlights:
• Record production for 2023 of 3.5 million silver-equivalent ounces (“AgEq”) representing a 64%
increase over 2022; total AgEq ounces are derived from 1,756,911 ounces of silver, 16,987 ounces of
gold, 3,555,466 pounds of lead and 3,868,262 pounds of zinc. ( See note to table below for
assumptions regarding the Company’s AgEq calculations).
• Silver production of over 1.7 million ounces is a 74% increase over 2022; Guanajuato Silver is a
primary silver producer; approximately 52% of revenues were derived from silver production in 2023,
and approximately 40% of revenue came from gold.
• Record lead and zinc production of 3.5M pounds and 3.8M pounds respectively; zinc production
demonstrated a 1 00% increase over 2022, while lead production was 164% higher over the same
period. All lead and zinc production comes exclusively from the Company’s Topia mine located in
northwest Durango.
• 2023 saw average silver recoveries of 84.5% and average gold recoveries of 88.8%.
• Total tonnes mined was up 46% over 2022, reflecting the continued ramp-up of production at all
four producing silver mines; total tonnes milled was up 42% over same period.
• Record revenue for 2023 of $66.1M representing a 79% increase over 2022; consolidated revenue
for the year was generated by a realized average price of $23.41 per silver ounce, $1,947 per gold
ounce, $0.97 per pound of lead, and $1.22 per pound of zinc.
James Anderson, Chairman and CEO said, “We have successfully navigated through a particularly challenging
year for the junior mining industry; we emerge from this period with vastly improved assets in terms of
production efficiency, scale, and economics. All four of our producing silver mines were the beneficiaries of
major capex investments in 2022; these adjustments and upgrades are already positively impacting
performance as we continue to build Guanajuato Silver into a mid-tier precious metals producer.”
Selected 2023 Financial Highlights:
• Cash costs of $18.22 per AgEq ounce, and AISC(5) of $22.91 per AgEq ounce reflected higher capital
expenditures during the year as the Company made significant investments designed to improve
efficiencies across all operations. (See note to table below for assumptions regarding the Company’s
AgEq calculations).
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• Over 45% of the 2023 net loss of $31.9M is comprised of non-cash items(8).
• As of December 31, 2023, the Company had cash and cash equivalents of $1,956,616 and negative
working capital(5) of $18,441,913 compared with cash of $8,832,936 and negative working capital(5)
of $5,972,704 as of December 31, 2021.
Consolidated Annual Production
Please refer to footnote 1 under the table below for the assumptions on the AqEq calculations.
The following table summarizes the Company’s consolidated operating and financial results for the years
ended December 31, 2023 and 2022:
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1. Silver equivalents set out in this news release are calculated using 82.91:1 (Ag/Au), 0.04:1 (Ag/Pb) and 0.05:1
(Ag/Zn) ratio for YTD 2023 and an 83.22:1 (Ag/Au), 0.05:1 (Ag/Pb) and 0.07:1 (Ag/Zn) ratio for YTD 2022,
respectively. Silver equivalents for 2021 are calculated using 80:1 (Ag/Au) for Q4 2021.
2. Cash cost per silver equivalent ounce include mining, processing, and direct overhead.
3. AlSC per Ag/Eq oz include mining, processing, direct overhead, corporate general and administration expenses,
on-site exploration, reclamation, and sustaining capital.
4. See Reconciliation of earnings before interest, taxes, depreciation, and amortization on page 29 of the MD&A and
below in this news release.
Year ended
Consolidated December 31
2023
December 31
2022 % Change
Operating
Tonnes mined 600,352 410,305 46%
Tonnes milled 593,798 418,849 42%
Silver ounces produced 1,756,911 1,011,877 74%
Gold ounces produced 16,967 11,174 52%
Lead produced (lbs) 3,555,466 1,349,100 164%
Zinc produced (lbs) 3,868,262 1,938,681 100%
Silver equivalent (“Ag/Eq”) ounces produced(1) 3,516,684 2,150,222 64%
Silver ounces sold 1,761,832 1,011,259 74%
Gold ounces sold 17,061 11,064 54%
Lead sold (lbs) 3,580,029 1,350,688 165%
Zinc sold (lbs) 3,831,509 1,874,138 104%
Ag/Eq ounces sold(1) 3,524,389 2,132,404 65%
Cost per tonne ($)(5) 106.27 80.86 31%
Cash cost per Ag/Eq ounce ($) (1)(2)(5) 18.22 15.84 15%
AISC per Ag/Eq ounce ($) (1)(3)(5) 22.91 21.55 6%
Financial $ $
Revenue 66,167,081 36,880,204 79%
Cost of Sales 77,966,369 43,763,193 78%
Mine operating loss (11,799,288) (6,882,989) 71%
Mine operating cashflow before taxes(7) (156,654) 2,037,914 (108%)
Net loss (31,943,447) (26,771,585) 19%
EBITDA(4)(5) (14,232,397) (13,825,789) 3%
Adjusted EBITDA(4)(5) (10,883,541) (9,192,344) 18%
Realized silver price per ounce(6) 23.41 21.23 10%
Realized gold price per ounce(6) 1,947.59 1,783.36 9%
Realized lead price per pound(6) 0.97 0.92 5%
Realized zinc price per pound(6) 1.22 1.42 (14%)
Working capital(5) (18,441,013) (5,972,704) 209%
Shareholders
Loss per share – basic and diluted (0.10) (0.10) 0%
Weighted Average Shares Outstanding 335,853,982 256,318,795 31%
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5. Mine Operating Cashflow Before Taxes, Cash cost per silver equivalent, cost per tonne, AISC per Ag/Eq ounce,
EBITDA, Adjusted EBITDA and working capital are non-IFRS financial measure with no standardized meaning
under IFRS, and therefore they may not be comparable to similar measures presented by other issuers. For
further information and detailed reconciliations of non-IFRS financial measures to the most directly comparable
IFRS measures see “Non-IFRS Financial Measures” below in this news release.
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.
8. Non-cash items include depreciation, stock-based compensation, loss or gain on derivatives, change of fair value
on contingent payments and unrealized FX.
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 min es 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 Fellow 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. Mr. Rivera has verified the data that supports the
technical information disclosed in this press release by reviewing production reports from each of the
Company’s mining operations.
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
Guanajuato Silver Bullion Store
Please visit our Bullion Store, where Guanajuato Silver coins and bars can be purchased.
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.
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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 improved assets in terms of production efficiency, scale, and
economics; the positive impact of capex investments; the intention to build Guanajuato Silver into a mid-tier
precious metals producer; and the Company’s status as one of the fastest growing silver producers in Mexico.
Such fo rward -looking statements and information reflect management's current beliefs and expectations 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 estimates of mineralized material at El
Cubo, VMC, San Ignacio and Topia and the assumptions upon 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 ramp up
processing of mineralized material at its processing plants at the projected rates and source sufficient high grade
mineralized material to fill such processing capacity; 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 cost estimates; decommissioning
and reclamation estimates; prices for energy inputs, labour, materials, supplies and services (including
transportation) and inflation rates remaining as estimated; no l abour -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, future prices of gold, silver and other metals, currency rate fluctuations,
rising inflation and interest rates, actual results of production, exploration and development 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, geopolitical conflicts including
wars, environmental risks, 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 successfully discover and mine sufficient quantities of
high grade mineralized material at El Cubo, VMC, San Ignacio and Topia for processing at its existing mills to increase
production, tonnage milled and recoveries rates of gold, silver, and other metals in the amounts, grades, recoveries,
costs and timetable anticipated. In addition, GSilver’s d ecision to process mineralized material from El Cubo, VMC,
San Ignacio, Topia and its other 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 impact of the resurgence of COVID-19, the ongoing war
in Ukraine and Israel-Palestine conflict, inflation and rising interest rates and the impact they w ill have on the
Company's operations, supply chains, ability to access mining projects or procure equipment, supplies, 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 most recently filed annual information form. 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.
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NON-IFRS FINANCIAL MEASURES
The Company has disclosed certain non-IFRS financial measures and ratios in this news release as discussed
below. These non-IFRS financial measures and non-IFRS ratios are widely reported in the mining industry as
benchmarks for performance and are used by Management to monitor and evaluate the Company's
operating performance and ability to generate cash. The Company believes that, in addition to financial
measures and ratios prepared in accordance with IFRS, certain investors use these non -IFRS financial
measures and ratios to evaluate the Company’s performance. However, the measures do not have a
standardized meaning under IFRS and may not be comparable to similar financial measures disclosed by
other companies. Accordingly, non-IFRS financial measures and non-IFRS ratios should not be considered in
isolation or as a substitute for measures and ratios of the Company’s performance prepared in accordance
with IFRS.
Non-IFRS financial measures are defined in National Instrument 52-112 – Non-GAAP and Other Financial
Measures Disclosure (“NI 52-122”) as a financial measure disclosed that (a) depicts the historical or expected
future financial performance, financial position or cash flow of an entity, (b) with respect to its composition,
excludes an amount that is included in, or includes an amount that is excluded from, the composition of the
most directly comparable financial measure disclosed in the primary financial statements of the entity, (c) is
not disclosed in the financial statements of the entity, and (d) is not a ration, fraction, percentage or similar
representation.
A non-IFRS ratio is defined by NI 52-112 as a financial measure disclosed that (a) is in the form of a ratio,
fraction, percentage, or similar representation, (b) has a non-IFRS financial measure as one or more of its
components, and (c) is not disclosed in the financial statements.
WORKING CAPITAL
Working capital is a non-IFRS measure that is a common measure of liquidity but does not have any
standardized meaning. The most directly comparable measure prepared in accordance with IFRS is current
assets net of current liabilities. Working capital is calculated by deducting current liabilities from current
assets. Working capital should not be considered in isolation or as a substitute from measures prepared in
accordance with IFRS. The measure is intended to assist readers in evaluating the Company’s liquidity.
MINE OPERATING CASH FLOW BEFORE TAXES
Mine operating cash flow before taxes is a non -IFRS measure that does not have a standardized meaning
prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers.
Mine operating cash flow is calculated as revenue minus production costs, transportation and selling costs
and inventory changes. Mine operating cash flow is used by management to assess the performance of the
mine operations, excluding corporate and exploration activities, and is provided to investors as a measure of
the Company’s operating performance.
As at
December 31,
2023
December 31,
2022
$ $
Current assets 20,658,097 27,182,590
Current liabilities 39,099,110 33,155,294
Working capital (18,441,013) (5,972,704)
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EBITDA
EBITDA is a non-IFRS financial measure, which excludes the following from net earnings:
• Income tax expense;
• Finance costs;
• Amortization and depletion.
Adjusted EBITDA excludes the following additional items from EBITDA:
• Share based compensation;
• Non-recurring impairments (reversals);
• Loss (gain) on derivative;
• Significant other non-routine finance items.
Adjusted EBITDA per share is calculated by dividing Adjusted EBITDA by the basic weighted average number
of shares outstanding for the period.
Management believes EBITDA is a valuable indicator of the Company’s ability to generate liquidity by
producing operating cash flow to fund working capital needs, service debt obligations, and fund capital
expenditures. Management uses EBITDA for this purpose. EBITDA is also frequently used by investors and
analysts for valuation purposes whereby EBITDA is multiplied by a factor or “EBITDA multiple” based on an
observed or inferred relationship between EBITDA and market values to determine the approximate total
enterprise value of a Company. Management believes that Adjusted EBITDA provides useful information to
investors and others in understanding and evaluating our operating results because it is consistent with the
indicators management uses internally to measure the Company's performance, and is an indicator of the
performance of the Company's mining operations.
EBITDA is intended to provide additional information to investors and analysts. It does not have any
standardized definition under IFRS and should not be considered in isolation or as a substitute for measures
of operating performance prepared in accordance with IFRS. EBITDA excludes the impact of cash costs of
financing activities and taxes, and the effects of changes in operating working capital balances, and therefore
is not necessarily indicative of operating profit or cash flow from operations as determined by IFRS. Other
companies may calculate EBITDA and Adjusted EBITDA differently.
31-Dec 30-Sep 30-Jun 31-Mar 31-Dec 30-Sep
2023 2023 2023 2023 2022 2022
$ $ $ $
Revenues 16,581,967 15,643,649 16,823,042 17,118,424 15,487,714 8,871,863
Production cost (14,825,898) (16,138,682) (16,415,956) (15,723,907) (12,911,041) (9,670,274)
Transportation and other support cost (768,203) (719,251) (878,096) (825,173) (596,916) (178,676)
Inventory changes (149,798) (361,927) 865,285 (382,130) 387,765 626,923
Mine operating cash flows before
taxes 838,068 (1,576,211) 394,275 187,214 2,367,522 (350,164)
31-Dec 30-Sep 30-Jun 31-Mar 31-Dec 30-Sep
2023 2023 2023 2023 2022 2022
$ $ $ $
Revenues 66,167,081 49,585,115 33,941,466 17,118,424 36,880,204 21,392,490
Production cost (63,104,443) (48,278,545) (32,139,863) (15,723,907) (33,868,210) (20,957,169)
Transportation and other support cost (3,190,722) (2,422,519) (1,703,268) (825,173) (1,011,081) (414,164)
Inventory changes (28,570) 121,228 483,155 (382,130) 37,001 (350,765)
Mine operating cash flows before
taxes (156,654) (994,721) 581,490 187,214 2,037,914 (329,608)
Three months ended
For the period ended
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Cash Cost per Ag/Eq Ounce, All-In Sustaining Cost per Ag/Eq Ounce and Production Cost per Tonne
Cash costs per silver equivalent oz and production costs per tonne are measures developed by precious
metals companies in an effort to provide a comparable standard; however, there can be no assurance that
the Company’s reporting of these non-IFRS measures and ratios are similar to those reported by other mining
companies. Cash costs per silver equivalent ounce and total production cost per tonne are non-IFRS
performance measures used by the Company to manage and evaluate operating performance at its operating
mining unit, in conjunction with the related IFRS amounts. They are widely reported in the silver mining
industry as a benchmark for performance, but do not have a standardized meaning and are disclosed in
addition to IFRS measures. Production costs include mining, milling, and direct overhead at the operation
sites. Cash costs include all direct costs plus royalties and special mining duty. Total production costs include
all cash costs plus amortization and depletion, changes in amortization and depletion in finished goods
inventory and site share-based compensation. Cash costs per silver equivalent ounce is calculated by dividing
cash costs and total production costs by the payable silver ounces produced. Production costs per tonne are
calculated by dividing production costs by the number of processed tonnes. The following tables provide a
detailed reconciliation of these measures to the Company’s direct production costs, as reported in its
consolidated financial statements.
December 31,
2023
September 30,
2023
June 30
2023
March 31,
2023
December 31,
2022
September 30,
2022
$ $ $ $
Net loss per financial statements (7,624,676) (7,062,157) (8,557,538) (8,699,078) (9,905,707) (8,405,337)
Depreciation and depletion – cost of sales 2,771,418 2,748,795 2,784,515 3,337,906 2,515,349 2,991,577
Depreciation and depletion – general and administration 118,143 116,383 70,544 56,782 59,208 57,210
Interest and finance costs (income), net 1,154,485 1,167,308 1,126,420 1,210,414 1,452,284 1,045,309
Current income tax 1,021,369 - - - (118,287) 118,287
EBITDA (2,559,261) (3,029,672) (4,576,059) (4,093,976) (5,997,153) (4,192,955)
Share based compensation 172,535 226,334 650,135 251,175 268,164 601,100
(Gain) loss on deriv ativ es 492,081 (455,394) (239,601) (134,138) 1,677,253 (754,358)
ARO unrealized foreign exchange (gain) loss 772,846 (596,485) 1,098,944 1,182,666 629,811 73,358
Other finance items, net 20,529 191,707 - 450,619 115,212 80,150
Transaction cost associated with the acquisition of MMR - - - - 145,387 1,216,992
Union pay ment associated with acquisition of "EL Cubo Mines Complex " - - (477,232) - - 488,634
Gain on change of fair value on gold contingent payments to Endeavour - - - - (1,624) (516,824)
Loss on change of fair value on silver contingent payments to MMR - - - - 269,478 -
Allowance on receivable amount from Great Panther - - - - 1,300,000 -
Other expenses (112,119) (64,671) - (118,287) - -
VAT write-off 113,809 116,008 133,885 162,144 93,412 318,975
Adjusted EBITDA (1,099,580) (3,612,173) (3,409,928) (2,299,797) (1,500,059) (2,684,927)
Three months ended
December 31,
2023
September 30,
2023
June 30
2023
March 31,
2023
December 31,
2022
September 30,
2022
$ $ $ $
Net loss per financial statements (31,943,447) (24,318,773) (17,256,616) (8,699,078) (26,771,585) (16,865,880)
Depreciation and depletion – cost of sales 11,642,634 8,871,216 6,122,421 3,337,906 8,920,902 6,405,553
Depreciation and depletion – general and administration 388,420 270,277 153,894 56,782 238,145 180,508
Interest and finance costs (income), net 4,658,627 3,504,142 2,336,834 1,210,414 3,786,748 2,334,464
Current income tax 1,021,369 - - - - 118,287
Deferred income tax expense (recovery) - - - - - -
EBITDA (14,232,397) (11,673,138) (8,643,467) (4,093,976) (13,825,790) (7,827,068)
Share based compensation 1,300,179 1,127,644 901,310 251,175 1,511,071 1,242,907
(Gain) loss on deriv ativ es (337,052) (829,133) (373,739) (134,138) (54,567) (1,731,820)
ARO unrealized foreign exchange (gain) loss 2,457,971 1,685,125 2,281,610 1,182,666 805,937 176,125
Other finance items: 185,623 165,094 - 450,619 (137,489) (252,701)
Loss (gain) on Settlement of Debts - - -
Loss (gain) on marketable securities - - -
Other One Time items - - -
Transaction cost associated with the acquisition of MMR - - 461,622 - 1,362,379 1,216,992
Union pay ment associated with acquisition of "EL Cubo Mines Complex " (488,634) (488,634) (488,235) - 488,634 488,634
Gain on change of fair value on gold contingent payments to Endeavour - - - - (518,448) (516,824)
Loss on change of fair value on silver contingent payments to MMR - - - - 269,478 -
Allowance on receivable amount from Great Panther - - - 1,300,000 -
Account receivable write-off on lead and zinc concentrate
Other expenses (295,077) (182,958) (118,287) (118,287)
VAT write-off 525,846 412,037 296,029 162,144 412,387 -
Adjusted EBITDA (10,883,541) (9,783,963) (5,683,156) (2,299,797) (8,386,408) (7,203,755)
For the period ended