Santacruz Silver Reports First Quarter 2019 Financial Results
TSX.V: SCZ
FSE: 1SZ
May 31, 2019
Santacruz Silver Reports First Quarter 2019 Financial Results
Vancouver, B.C. – Santacruz Silver Mining Ltd. (TSX.V:SCZ) (the “Company” or “Santacruz”) reports on
the operating and financial results from the Veta Grande Project in Zacatecas, Mexico and the Rosario Project
in San Luis Potosi, Mexico for the first quarter of 2019. The full version of the financial statements and
accompanying management’s discussion and analysis can be v iewed on the Company’s website at
www.santacruzsilver.com or on SEDAR at www.sedar.com. All amounts are in thousands of US dollars
unless otherwise indicated.
Q1 2019 Highlights
• Consolidated mining operations re sulted in a loss of $ 1,846 (Q1 2018 – loss of $806) , a $2,393
improvement over Q4 2018;
• Consolidated cash cost per si lver equi valent ounce sold decreased by 55% and 57% to $20.64 as
compared respectively to Q1 2018 and Q4 2018
"During the first quarter we saw again a significant improvement in our mining operations as our quarter over
quarter revenues from mining operations and reduced production costs demonstrate. This trend of increased
metal production, reduced production costs and improved cash flow from mining operations has continued into
Q2 and is expected to continue for the rest of the year. ” stated Arturo Préstamo , Chief Executive Offi cer of
Santacruz. “These positive operations developments reflect the results of our ongoing exploration program
and mill operational efficiencies at Veta Gr ande as well as significant mine development works being carried
out at both Veta Grande and Rosario. They confirm that the operations initiatives and strategies put in place
by our Operating Team, headed by Mr. Carlos Silva, COO, are working.”
Selected operating and financial information for the three-month periods ended March 31, 201 9,
December 31, 2018 and March 31, 2018 is presented below:
2019 Q1 2018 Q4 2018 Q1
Financial
Revenue – Mining Operations 2,490 1,258 753
Revenue – Mining Services 790 1,466 2,413
Gross (Loss) Profit (4) (514) (3,073) (117)
Impairment - (1,486) -
Net Loss (1,846) (4,239) (806)
Net Loss Per Share – Basic ($/share) (0.01) (0.03) (0.00)
Adjusted EBITDA (4) (921) (2,404) (209)
Operating
Material Processed (tonnes milled) 42,904 53,396 48,068
Silver Equivalent Produced (ounces) (1) 257,138 237,542 154,175
Silver Equivalent Sold (payable ounces) (2) 195,976 106,757 59,648
Production Cost per Tonne (3) ($/t) 83.23 89.97 52.97
Cash Cost per Silver Equivalent ($/oz.) (3) 20.64 48.32 45.94
All-in Sustaining Cost per Silver Equivalent ($/oz.) (3) 24.38 56.19 55.84
Average Realized Silver Price per Ounce ($/oz.) (2) (5) 15.10 14.40 16.78
(1) Silver equivalent ounces produced in 201 9 have been calculated using prices of US$1 5.25/oz., US$1, 281/oz., US$0.94/lb. and
US$1.20/lb. for silver, gold, lead and zinc respectively applied to the metal content of the lead and zinc concentrates produced by the
Company. Silver equivalent ounces produced in 2018 have been calculated using prices of US$17.00/oz., US$1,295/oz., US$1.00/lb.
and US$1.35/lb. for silver, gold, lead and zi nc respectively applied to the metal content of the lead and zinc concentrates produced
by the Company.
(2) Silver equivalent sold ounces have been calculated using the realized silver pric es stated in the table above, applied to the payable
metal content of the lead and zinc concentrates sold by the Company.
(3) The Compa ny reports non-IFRS measures which i nclude Production Cost per T onne, Cash Cost p er Silver Equivalent, All -in
Sustaining Cost per Silver Equivalent and Average Realized Silver Price per Ounce. These measures are widely used in the mining
industry as a ben chmark for performance, but do not h ave a standardized meaning a nd may differ fro m m ethods used by other
companies with similar descriptions.
(4) The Company reports additional non-IFRS measures wh ich include Gross Profit (Loss) and Adjusted EBITDA. These a dditional
financial disclosure measures are intended to provide additional information.
(5) Average realized silver price per ounce is prior to all treatment, smelting and refining charges.
Financial Results
The Company realized an average silver price of $15.10 per ounce during Q 1 2019 which represents a 10%
decrease from Q1 2018 and a 5% increase from Q4 2018.
The Company recorded a net loss of $1,846 in Q1 2019 compared to a net loss of $806 in Q1 2018 and a net
loss of $ 4,239 in Q 4 2018. The net loss es for all three periods were posit ively impacted by the operatin g
results from mining services.
Revenues in Q1 2019 of $3,280 include mining operations of $2,490 (Q1 2018 - $753; Q4 2018 - $1,258) and
mining services of $790 (Q1 2018 - $2,413; Q 4 2018 - $1,466). The $790 of mining services revenues
recorded in Q 1 2019 reflects a sh ort-term decrease in service requirements from Carrizal .Mining.
Management anticipates that it will resume providing mining services to Carrizal Mining during Q3 2019.
The Company recorded a gross loss from operations of $514 during Q1 2019 (Q1 2018 – loss of $117; Q4
2018 – loss of $3,073). During these periods the mining operatio ns resulted in gross losses of $1,304, $2,129
and $4,539 for Q1 2019, Q1 2018 and Q4 2018 respectively while mining services resulted in gross profits of
$790, $2,012 and $1,466 for the same periods. On a project basi s, Veta Grande re corded a gross loss from
mining operations of $976 in Q1 2019 (Q1 2018 – loss o f $1 ,152; Q 4 2018 – loss of $ 2,313) and R osario
recorded a gross loss of $328 in Q1 2019 (Q1 2018 – loss of $977; Q4 2018 – loss of $2,226).
Management expects that results from operations will imp rove in Q2 20 19 and therea fter as preliminary
production estimates for April 2019 indicate tha t the conso lidated production for the Company was 20,300
tonnes processed resulting in 125,600 silver equivalent ounces bein g produced, sourced as to 13,600 tonne s
and 82,170 silver equivalent ounces from Veta Grande and 6,700 tonnes and 43,430 silver equi valent ounces
from Rosario.
Operational Results and Costs
Cash cost per ounce in Q1 2019 was $20.64 per payable ounce of silver sold, a decrease of 55% from $45.94
per ounce in Q1 2018 and a decrease of 57% from $48.32 per ounce in Q4 2018. The decrease in cash cost
in Q1 2019 reflects improved head grade and metal recoveries at Veta Grande resulting in increased silv er
equivalent ounces produced.
All-in Sustaining Cost per ounce in Q1 2019 was $24.38 per payable ounce of silver sold , a decrease of 56%
from $55.84 per ounce in Q1 2018 and a decrease of 57% from $56.19 per ounce per ounce in Q4 2018. The
changes occurred for the same reasons as those relating to the cash cos t per ounce changes referenced
above.
About Santacruz Silver Mining Ltd.
Santacruz is a M exican focused silver company with two pr oducing silver projects ( Veta Grande Project and
Rosario Project) and two exploration properties (Minillas Property and Zacatecas Properties). The Company is
managed by a technical team o f professionals w ith proven track records in developing, operating and
discovering silver mines in Mexico. Our corporate objective is to become a mid-tier silver producer.
‘signed’
Arturo Préstamo Elizondo,
President and CEO
For further information please contact:
Arturo Prestamo
Santacruz Silver Mining Ltd.
Email: [email protected]
Telephone: (011) (52) 81 8378 5707
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 information
Certain s tatements contai ned in this ne ws rel ease constitute "forward -looking information " as such term is
used in applicable Canadian securities laws. Forward -looking information is based on plans, expectations and
estimates of m anagement at the date the informati on is provided a nd is subject to cer tain factors and
assumptions. In making the forward-looking statements i ncluded in this news release, the Company has
applied several material assumptions, that the Company's financial condition and development plans do not
change as a result of unforeseen events, that third party mineralized mater ial to be milled by the Company will
have properties consistent with management's expectations, that the Company will receive all required
regulatory approvals, and that future metal prices an d the demand a nd market outlook for metals will remain
stable or improve. Forwar d-looking in formation is subject to a variety of risks and uncer tainties and other
factors that could cause plans, estimates and actual results to vary materia lly from those p rojected in su ch
forward-looking information. Factors that coul d cause the forwa rd-looking information in this news release to
change or to be inaccurate include, but are not limited to, the risk that any of the assumptions referred to prove
not to be val id or reliable , which could result in lower revenue, higher cost , or lower produc tion levels; delays
and/or cessation in planned work; changes in the Company's financial condition and development plans;
delays in regulatory approval; risks associated with the interpretation of data (including in respect of the third
party mineralized material) regarding the geology, grade and continuity of mineral deposits; the possibility that
results will not be consisten t with the Company's expectations, as well as the o ther risks and uncertainties
applicable to mineral exploration and development activities and to the Company as set forth in the Company's
continuous disclosure filings filed under the Company's profile at www.sedar.com. There can be no assurance
that any forward -looking information will prove to b e accurate, as actual results and future events could differ
materially from those anticipated in such statements. According ly, the reader should not place any undue
reliance on forward -looking i nformation or statements. The Company undert akes no obligatio n to update
forward-looking information or statements, other than as required by applicable law.
Rosario Project
The decisions to commence production at the Ro sario Mine, Cinco Estrellas Property and Membrillo Prospect
were not based on a feasibility study of mineral reserves demonstrating economic and technical viabil ity, but
rather on a more preliminary estimate of inferred m ineral resources. Accordingly, ther e i s increased
uncertainty and economic and technical risks of failure associate d with this produ ction decisi on. Production
and economic variables may vary consi derably, due to the absence of a complete and detailed site analysis
according to and in accordance with NI 43-101.
Veta Grande Project
The decision to commence production at Veta Grande Project was not based on a feasibility study on mineral
reserves demo nstrating economic and technical viability. Accordingly, th ere is increased uncertainty and
economic and techn ical risks of failure associated with this production decision. Production and e conomic
variables may vary considerably due to the absence of a complete and detailed site analysis according to and
in accordance with NI 43-101.