Santacruz Silver Reports Third Quarter 2020 Financial Results
TSX.V: SCZ
FSE: 1SZ
November 30,2020
Santacruz Silver Reports Third Quarter 2020 Financial Results
Vancouver, B.C. – Santacruz Silver Mining Ltd. (TSX.V:SCZ) (the “Company” or “Santacruz”) reports on
operating and financial results of the Zimapan Mine in Zimapan Hidalgo Mexico and the Rosario Project in San
Luis Potosi, Mexico for the third quarter of 2020. The full version of the financial statements and
accompanying management’s discussion an d an alysis can be v iewed on the Company’s website at
www.santacruzsilver.com or on SEDAR at www.sedar.com. All amounts are in thousan ds of US dollars
unless otherwise indicated.
Q3 2020 Highlights (compared to Q3 2019)
• Gross profit from mining operations of $1,259 ($102 in Q3 2019);
• Net loss of $163 or $0.00/share (net loss of $886 or $0.00/share in Q3 2019);
• Consolidated cash cost per silver equivalent ounce sold decreased by 13% and AISC decreased by
12% to $18.38/oz and $19.85/oz respectively; and
• Cash cost per tonne decreased 13% to $43.06/t ($49.58/t in Q3 2019).
Carlos Silva, CEO of Santacruz stated , "Management’s focus for 2020 is to retur n the Zimapan Mine to
historical production levels while reaching our budgeted efficiencies and conclude the acquisition of the mine.
At the Rosario Project, our focus is to further increase mill throughput tonnage from the already improved level
achieved in October 2020 to 400 tpd by the end of Q 4 2020 which should result in positive cashflows in Q4
2020.” Mr. Silva continued , “The arrival of additional underground equipment at both Zimapan and Rosario
during mid-October has been essential to our month over mo nth increased production and cost efficiencies
which should allow us to reach budgeted operational levels during Q4 2020.”
Financial Results
Selected financial information for the three-month periods ended September 30, 2020, June 30, 2020 and
September 30, 2019 is presented below:
2020 Q3 2020 Q2 2019 Q3
Revenue – Mining Operations 9,437 5,939 11,439
Revenue – Mining Services - - 293
Gross Profit (Loss) (1) 1,259 796 102
Debt forgiveness - 412 -
Net Loss (163) (636) (886)
Net Loss Per Share – Basic ($/share) (0.00) (0.00) (0.00)
Adjusted EBITDA (1) 12 12 (705)
(1) The Company reports additional non -IFRS measures which include Gross Profit (Loss) and Adju sted EBITDA.
These additional financial disclosure measures are int ended to provide additional infor mation. See the Company’s
MD&A f iled o n SEDAR o r its websit e fo r a reconcili ation of these amounts to the unaud ited interim financial
statements for the respective periods.
(2) Financial results from the Zimapan Mine have been recorded on a 100% basis in the Q3 and Q2 2020 figures and
as to 50% in Q3 2019 as the Company did not acquire 100% of the lease rights to the Zimapan Mine until October
2019.
The Company realized an average silver price of $21.18 per ounce during Q3 2020, which represents a 21%
increase from Q3 2019 and a 28% increase from Q2 2020.
The Company recorded a net loss of $163 ($0.00 per share) for the three-month period ended September 30,
2020 compared to a net loss of $886 ($0.00 loss per share) for the same period in 2019.
Silver equivalent production for Q3 2020 increased by 3% to 977,678 ounces as compared to 952,826 ounces
in Q3 2019. This modest increase is largely due to the Company including 100% of the production from the
Zimapan Mine in Q3 2020 as compared to 50% in Q3 2019 offset b y nil production from the Vet a Grande
Project in Q3 2020.
Operational Results and Costs
Selected operating information for the three-month periods ended September 30, June 30, 20 20 and
September 30, 2019 is presented below:
(1) Silver equivalent ounces produced in 2020 have been calculated using prices of $17.85/oz., $1,480/oz., $0.92/lb,
$1.09/lb and $2.80/lb. for silver, gold, l ead, zinc and cop per respectively applied to the metal content of the
concentrates produced by the Veta Grande Project, Rosario Project and the leased Zimapan Mine. Operations at the
Vets Grande Project were suspended in Q1 2020 and to date have not resume d. Silver equivalent ounces produced in
2019 have been calculated using prices of $15.25/oz., $1,281/oz., $0.94/lb, $1.20/lb and $2.92/lb for silver, gold, lead,
zinc and copper respectively applied to the metal content of the concentrates produced by the Veta Grande Project and
the Rosario Project for all of 2019 as well as 50% and 100% of the metal content of the concentrates produced at the
leased Zimapan Mine in Q3 and Q4 2019 respectively.
(2) Silver equivalent sold ounces have been calculated using the realized silver prices stated in the table above, applied to
the payable m etal content of the concentrates sold from the Veta Grande Project, Rosario Project and Zimapan Mine
respectively.
(3) The Company reports non -IFRS measures which include Cash Cost per Silver Equivalent, All-in Sustaining Cash Cost
per Silver Equivalent, Cash Cost o f Produc tion per Tonne, and Average Realized Silver Price per Ounce. These
measures are widely used in the m ining industry as a benchmark for performance, but do no t have a standard ized
meaning and may differ from methods used by other compani es with similar descriptions. See the Company’s MD&A
filed on SEDAR or its website for a reconciliation of these amounts to the unaudited interim financial statements for the
respective periods.
2020 2019
Q3 Q2 Q3
Material Processed (tonnes milled)
Zimapan Mine (5) 164,846 106,725 82,242
Veta Grande Project - - 43,999
Rosario Project 11,794 10,074 22,048
Consolidated 176,640 116,799 148,289
Silver Equivalent Produced (ounces) (1) (4)
Zimapan Mine (5) 920,985 639,021 606,583
Veta Grande Project - - 214,282
Rosario Project 56,693 70,744 131,961
Consolidated 977,678 709,765 952,826
Silver Equivalent Sold (payable ounces) (2)
Zimapan Mine (5) 625,036 461,324 350,571
Veta Grande Project - - 114,705
Rosario Project 36,628 30,018 65,139
Consolidated 661,664 491,341 530,415
Cash Cost of Production per Tonne (3)
Zimapan Mine 39.91 40.67 41.89
Veta Grande Project - - 47.67
Rosario Project 87.08 49.53 82.10
Consolidated 43.06 41.44 49.58
Cash Cost per Silver Equivalent Ounce (3)
Zimapan Mine 17.45 14.88 15.70
Veta Grande Project - - 19.79
Rosario Project 34.13 21.45 27.96
Consolidated 18.38 15.25 18.52
All-in Sustaining Cash Cost per Silver Equivalent Oz (3)
Zimapan Mine 18.54 16.00 18.34
Veta Grande Project - - 26.77
Rosario Project 42.07 31.91 38.25
Consolidated 19.85 16.90 22.51
Average Realized Silver Price per Ounce (3)
Zimapan Mine 21.01 16.47 17.51
Veta Grande Project - 17.64
Rosario Project 24.08 16.89 17.65
Consolidated 21.18 16.49 17.52
(4) Amounts reported for the Zimapan Mine reflect the Company’s proportionate interest in the mine which was 50% in Q3
2019 and 100% in Q4 2019 and thereafter.
Cash cost per tonne of mineralized material processed decreased by 13% in Q3 2020 to $43.06/t as
compared to $49.58/t in Q3 2019. This positive change in unit costs reflects primarily a 5% decrease
in unit costs at th e Zimapan M ine and the impact on unit costs from the suspension of mining
activities at the Veta Grande Project offset by a 6% increase in unit costs at the Rosario Project. The
unit costs at both the Zimapan Mine and Rosario Project are expected to continue to decrease as a
result of increased throughput tonnage at the respe ctive milling facilities. As compared to the Q2
2020 unit costs, the Q3 2020 cash cost of production per tonne of miner alized material processed
increased by 4%. This variance is due to a 25% decrease in unit costs at the Rosario project which
in turn reflects low underground mining equipment availability during Q3 2020 q uarter. This matter
was resolved in October 2020 with the addition of two new scooptrams at the Rosario Project.
Cash cost per silver equivalent ounce sold was essentially unchanged in Q3 2020 at $18.38/oz as
compared to Q3 2019. Compared to Q2 2020, the Q3 2020 unit costs increased 21%. This negative
was also due to low underground mining equipment availability at both projects which was resolved
in October 2020 with the delivery of new underground scooptrams at each project. As reported in
the Company’s press release on November 18, 202 0, the consolidated mill throu ghput to nnage
increased by 17% while silver equivalent ounces prod uced increased by 21% in October 2020
compared to the monthly averages for Q3 2020. Both of these in creases were largely the result of
increased underground equipment availability.
All-in sustaining cash cost per silver equivalent ounce sold decreased by 12% in Q3 2020 to
$19.85/oz as com pared to $22.51/oz in Q3 2019. This change in unit costs largely reflects the
suspension of mining activities at the Veta Grande Project. Compared to the Q2 2020-unit cost, Q3
saw a 17% increase to AISC. Again, with the expected improvement in underground equipment
availability in Q4 2020 and beyond, management anticipates that AISC will decrease.
About Santacruz Silver Mining Ltd.
Santacruz i s a Mexican focused silver c ompany that currently owns and operates the Rosario Mine. The
Company also owns 100% of Carrizal Mining S.A. de C.V. Carrizal Mining holds a 20% working interest in the
Company’s Veta Grande Project and has the right to operat e the Zimapa n Mine until Dec ember 31, 2020
under a mining lease agreement. On July 28, 2020 the Company announced th at it had reached agreement
with Minera Cedros, S.A. de C.V. (“Minera Cedros”), a wholly owned subsidiary of Industrias Peñoles, S.A.B.
de C.V., to acq uire outright th e Zimapan Mine for US$20.0 million (plus applicable IVA of US$3.2 million ),
subject to a number of conditions, including receipt of all necessary regulatory approvals including approval of
the TSX Venture Exchange (" TSXV") to th e transaction which will con stitute a "Fund amental Acquisition"
pursuant to TSXV Policy 5.3.
The Company is managed by a tech nical t eam of professi onals with proven tra ck rec ords in developing,
operating and discovering silver mines in Mexico. Our corpor ate objectiv e is to b ecome a mid-tier si lver
producer.
‘signed’
Arturo Préstamo Elizondo,
Executive Chairman
For further information please contact:
Arturo Prestamo
Santacruz Silver Mining Ltd.
Email: [email protected]
Telephone: (604) 569-1609
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 this news release co nstitute "forward -looking information" as such term is
used in applicable Canadian securities laws , including the agreement with Minera Cedros and the acquisition
of the Zim apan Mine by the Company. Forward -looking information is based on plans, expectatio ns and
estimates of ma nagement a t the d ate the information is provided and is subject to certain factors and
assumptions. In mak ing the forward -looking statements included in this news rel ease, the Company has
applied several material assumptions, including that the Company's financial condition and development plans
do not change as a result of unforeseen events, that the Company will receive all required regula tory
approvals and that futu re metal prices and the demand and market outl ook for metals will r emain stable or
improve. Forwar d-looking information is subject to a variety of risks and uncertainties and other factors that
could cause plans, estimates and actual results 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 li mited to, unanticipated delays i n obtaining or failure to ob tain regulatory or
stock exchange approvals; the risk that any of t he assumptions referred to above prove not to be valid or
reliable; there can be no assurance that the Company will be successful in completing the acquisition o f the
Zimapan Mine (including obtaining the necessary funding); risk of de lays or inability to obtain the approval of
the TSXV to the acquisition of the Zimapan Mine; market conditions and volatility and global economic
conditions, including increased vola tility and p otentially negative capital raising conditions resulting from the
continued COVID-19 pandemic and risks r elating to the extent and duration of such pandemic and its impact
on global markets ; risk of delay and/or cessation in planned work or changes in the Company's financ ial
condition and development plans; risks ass ociated with the inte rpretation of data (in cluding in respect of the
third party mineralized material) regarding the geology, grade and continuity of mineral deposits; the
uncertainty of the geo logy, grade and continuity of mineral deposits and the risk of unexpected variations in
mineral resources, grade and/or recovery rates; risks related to gold, silver, base metal and other commodity
price fluctuations; risks relating to environm ental regulation and liability; the possibility that results will not be
consistent with the Company's expectations, as well as the other risks and uncertainties applicable to mineral
exploration and development activities a nd to the Company as set forth i n the Compan y's continuous
disclosure filings filed under the Company's pr ofile 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. A ccordingly, the reade r should not place any undue reliance on
forward-looking information or statements. The Company undertakes no obligation to updat e forward-looking
information or statements, other than as required by applicable law.
Rosario Project
The decisions to commence production at the Rosario Mine, Cinco Estrellas Property and Membrillo Prospect
were not based on a feasibility study of minera l reserves demonstrating economic and techni cal viability, but
rather on a more preliminary estimate of in ferred mineral resour ces. A ccordingly, ther e is incre ased
uncertainty and economic and technical risks of failure associated with this production deci sion. Production
and economic va riables may vary considerably, due to the absence of a complete and detail ed site analysis
according to and in accordance with NI 43-101.
Zimapan Mine
Production at the Zimapan Mine is not supported by a feasibility study on mineral reserves demonstrating
economic and technical viability or any other independent economic study under NI 43-101. Accordingly, there
is increased uncertainty and economic and technical risks of failure associated with production operations at
the Zimapan Mine . Production and eco nomic variabl es may vary cons iderably due to the absence of a
complete and detailed site analysis according to and in accordance with NI 43-101. There is no assurance that
the Company will be successful in negotiating and completing any acquisition of the Zimapan Mine. Any
transaction to acquire the Zimapan Mine will be subject to receipt of all nece ssary reg ulatory appro vals,
including Santacruz obtaining the approval of the TSX Venture Exchange.