SilverCrest Metals Reports Strong 4Q22

Canada-based mining company SilverCrest Metals reported its 4Q22 operational results and gave an update on the Las Chispas Mine, one of its most important assets. The company stated that both its finances and the Las Chispas mine touted a positive and on-budget performance. 

During 4Q22, the company reported greater recoveries and produced metals owed to a combination of better-than-expected throughput and processing recoveries. SilverCrest Metals said it recovered 11,940oz of gold at an average grade of 3.67g/t. It also produced 1.2Moz of silver at an average grade of 382g/t and 2.2Moz of AgEq at 701g/t.

On Nov. 1, 2022, the company declared commercial production at Las Chispas after achieving a continuous two-month period operating the processing plant at a minimum of 80% capacity for its nameplate design of 1,250t/d, as well as reporting recoveries of more than 85%. 

Pierre Beaudoin, COO, Silver Crest Metals, considered that 2022 was a key year for the company as the construction at Las Chispas was completed ahead of schedule and under budget, a “rare achievement for the industry,” Beaudoin declared. “This milestone set the positive tone for the ramp-up and declaration of commercial production in 4Q22. We are currently working on optimization at Las Chispas’ operations, and we expect to complete its Updated Technical Report in 2Q23 to provide the foundation of production and cost guidance going forward,” he added. 

At the end of November 2022, the company achieved a permanent connection to a 33kV powerline whose line stability had been improved. SilverCrest believes the total contracted capacity of 7.6MW would be sufficient to provide power to its operation. 

The company completed an additional 8km underground development at the Las Chispas mine, with an average mining rate of 700t/d. This remains below the 750t/d estimated in the original company’s guidance, but the company noted that it is in line with its revised guidance of 600t/d-700t/d. 

According to SilverCrest’s 2021 Feasibility Study, the company should have mined an estimated 214,400t. Nevertheless, it mined over 201,100t of ore in 4Q22. The company explained that the lower result was driven by lower productivity due to safety concerns and narrower vein widths in some areas. 

The company ended 2022 having cash and cash equivalents of US$50.8 million. SilverCrest also managed to refinance its US$90 million project finance facility and use US$40 million cash to reduce its debt to US$50 million. Quarterly repayments on the facility will start in June 2023. The company also has access to a US$70 million revolving credit facility.