Santacruz Silver Reports Second Quarter 2019 Financial Results
TSX.V: SCZ
FSE: 1SZ
August 30, 2019
Santacruz Silver Reports Second 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 second 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.
Q2 2019 Highlights
• Consolidated mining operations generated a gross profit of $251 including gross profit from Rosario of
$54 and gross loss from Veta Grande of $691 plus mine services gross profit of $888;
• Net loss after taxes of $1,137;
• Consolidated cash cost per silver equivalent ounce sold $16.07 and AISC of $18.37
"Our second quarter operating and financial re sults continued our positive trend of the past three quarters.”
stated Arturo Préstamo, Chief Executive Offi cer of Santacruz. “At Rosario we have t urned the corner and are
generating positive cash flow from operations while at V eta Grande we re duced the operat ing loss despite a
mechanical problem with one of the ball mills. With the ball mill now back online in Q3 we expect continued
improvement at Veta Grande and with overall operations.”
Financial Results
Selected financial information for the three-month periods ended June 30, 2019, March 31, 2019 and June
30, 2018 is presented below:
2019 Q2 2019 Q1 2018 Q2
Revenue – Mining Operations 3,247 2,490 1,466
Revenue – Mining Services 888 790 3,569
Gross Profit (Loss) (4) 251 (514) 1,287
Debt forgiveness - - 2,590
Net Loss (Income) (1,137) (1,846) 3,297
Net Loss (Income) Per Share – Basic ($/share) (0.01) (0.01) 0.02
Adjusted EBITDA (4) (113) (921) 1,290
The Company realized an average silver price of $14.66 per ounce during Q2 2019 which represents an 11%
decrease from Q2 2018 and a 3% decrease from Q1 2019.
The Company recorded a net loss of $1,137 in Q2 2019 compared to net income of $3,297 in Q2 2018 and a
net loss of $ 1,846 in Q 1 2019. The net income recorded in 2018 includes a debt for giveness amount of
$2,590 and gross profit from mine services of $2,012.
Revenues in Q2 2019 of $4,135 include mining operations of $ 3,247 and mining services of $ 888. The Q2
2019 mining operations revenue was generated from the Veta Grande Project as to 47% (Q1 2019 – 66%; Q2
2018 - 44%) and the Rosario Project as to 53% (Q1 2019 – 34%; Q2 2018 - 56%). The revenue increase was
the result of a 139% increase in the silver equivalent ounces sold in Q2 2019 as compared to Q2 2018 offset
by an 11% decrease in the average realized price per ounce of silver sold.
The Company recorded a gross profit from operations of $251 during Q2 2019 (Q2 2018 – $1,287; Q1 2019 –
loss of $514). During these periods the mining operations resulted in gross losses of $637, $1,941 and $1,304
for Q2 2019, Q2 2018 and Q1 2019 respectively while mining services resulted in gross profits of $888, $3,452
and $790 for the sam e periods. Veta Grande re corded a gross loss from mining operations of $691 in Q2
2019 (Q2 2018 – loss of $1,679; Q1 2019 – loss of $976) and Rosario recorded a gross profit of $54 in Q2
2019 (Q2 2018 – loss of $486; Q1 2019 – loss of $328).
Management expects that results from operations will imp rove in Q 3 2019 and therea fter as Veta Grande
production is expected to increase..
Operational Results and Costs
Selected operating information for the three-month periods ended June 30 , 201 9, March 31, 2019 an d
June 30, 2018 is presented below:
2019 Q2 2019 Q1 2018 Q2
Material Processed (tonnes milled)
Veta Grande Project 37,156 32,625 36,622
Rosario Project 20,789 10,279 15,403
Consolidated 57,945 42,904 52,025
Silver Equivalent Produced (ounces) (1)
Veta Grande Project 240,208 202,787 84,271
Rosario Project 133,110 54,351 89,904
Consolidated 373,318 257,138 174,175
Silver Equivalent Sold (payable ounces) (2)
Veta Grande Project 149,898 134,549 51,178
Rosario Project 127,850 70,825 65,136
Consolidated 277,748 205,374 116,314
Production Cost per Tonne (3) ($/t)
Veta Grande Project 59.59 73.29 58.16
Rosario Project 68.55 114.80 85.05
Consolidated 62.80 83.23 66.12
Cash Cost per Silver Equivalent ($/oz.) (3)
Veta Grande Project 17.68 20.71 45.33
Rosario Project 14.23 19.78 22.49
Consolidated 16.09 20.39 32.54
All-in Sustaining Cost per Silver Equivalent ($/oz.) (3)
Veta Grande Project 19.70 23.70 50.00
Rosario Project 16.81 24.44 25.90
Consolidated 18.37 23.96 36.43
Average Realized Silver Price per Ounce ($/oz.) (2) (5)
Veta Grande Project 14.67 15.08 16.55
Rosario Project 14.65 15.15 16.55
Consolidated 14.66 15.10 16.55
(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 prices 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 methods 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.
Cash cost per ounce in Q2 2019 was $16.09 per payable ounce of silver sold, a decrease of 51% from $32.54
per ounce in Q2 2018 and a decrease of 21% from $20.39 per ounce in Q1 2019. The decrease in cash cost
in Q 2 2019 reflects improved head grade and metal recoveries at Veta Grande as well as imp roved head
grade at Rosario resulting in increased silver equivalent ounces produced.
All-in Sustaining Cost per ounce in Q2 2019 was $18.37 per payable ounce of silver sold , a decrease of 50%
from $36.43 per ounce in Q2 2018 and a decrease of 23% from $23.96 per ounce per ounce in Q1 2019. 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 Mexican focused silver company with two producing silver projects, Veta Grande and Rosario,
and two exploration properties, the Minillas property and Zacatecas properties . The Company also owns 50%
of PCG Mining, S.A. de C.V, a holding compa ny that owns 100% of Carrizal Mining S.A. de C.V. Carrizal
Mining is a private Mexican mining company , the principal ass et of which is a 20% working interest in the
Company’s Veta Grande Project . Carrizal Mining also h as the right to operate the Zimapan Mine until
December 31, 2019 under a mining lease agreement.
The Company is managed by a technical tea m of professional s with proven tra ck records in developing,
operating and discovering silver m ines 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 statements contained in t his news release constitute "forward -looking information" as such term is
used in applicable Canadian securities laws , including statements relati ng to completion of the Transaction.
Forward-looking information is based on plans, expectations and estimates of management at the date the
information is provided and is subject to certain factors and assumptions. In making the forward -looking
statements included 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 the
Company will receive all requir ed regulatory approv als and that future metal prices and the demand and
market outlook for metals will remain stable or improve. Forward -looking information is subject to a variety of
risks and uncertainties and other factors that could cause plans, estimates and actual resu lts to vary materially
from those projected in such forward -looking information. Factors that could cause the forward -looking
information in this news release to change or to be inaccurate include, but are not limited to, the risk that any
of the assumpti ons referred to above prove not to be valid or reliable, which could result in lower revenue,
higher cost, or lower production levels; delays and/or cessation in planned work; changes in the Company's
financial condition and development plans; risks associ ated with the interpretation of data (including in respect
of the third party mineralized material) regarding the geology, grade and co ntinuity of mineral deposits; the
possibility that results will not be consistent with the Company's expectations, as wel l as the other 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 be accurate, as actual results and future
events could differ materially from those anticipated in such statements. Accordingly, the reader should not
place any undue reliance on forward -looking information or statements. The Company undertakes no
obligation 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 i ncreased
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.