SilverCrest Reports Q1 2012 Financial Results; Cash Flow from Operations of $12.2 Million ($0.14 Per Share)

VANCOUVER, BRITISH COLUMBIA--(Marketwire -05/15/12)- SilverCrest Mines Inc. (the "Company") (TSX-V: SVL)(STVZF.PK)(STVZF.PK) is pleased to announce its financial results for the first quarter ended March 31, 2012 (all figures in U.S. dollars unless otherwise specified.)

Q1 2012 FINANCIAL HIGHLIGHTS:

 

-   Cash flow from operations (1)              $12.2 million ($0.14 per
                                               share)
-   Cash operating cost per silver equivalent  $7.00
    ounce sold (2)
-   Revenues reported - IFRS (3)               $19.6 million
-   Comprehensive earnings                     $6.3 million ($0.07 per
                                               share)
-   Cash, cash equivalents and short term      $36.5 million (at March 31,
    investments                                2012)

J. Scott Drever, President stated; "We had an excellent beginning for 2012. In Q1 we sold 641,546 silver equivalent ounces, with an average cash operating costs of $7.00 per ounce. The Santa Elena open pit heap leach mine operations continue to perform well and generated cash flows of $12.2 million which will help finance the Santa Elena Expansion plan to double metals production by 2014 and accelerate the exploration and development of our polymetallic La Joya Project. During the first quarter, total production was consistent with our plan and cash operating costs were below plan. As a result, we are confident in achieving our 2012 guidance of production of 435,000 silver ounces and 33,000 gold ounces at an average cash operating cost of $8.20 per silver equivalent ounce."

 

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Financial and Operating Highlights:                  Q1 2012        Q1 2011
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Cash flow from operations (1)                  $  12,231,163  $     (52,660)
Cash flow from operations (1) per share        $        0.14  $       (0.00)
Cash operating cost per silver equivalent
 ounce sold (2)                                $        7.00              -
Revenues (3)
 Silver revenue                                $   4,699,470              -
 Gold revenue - cash basis                     $  13,077,221              -
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                                               $  17,776,691              -
 Gold revenue - non cash
    - adjustment to market spot price          $   1,088,230              -
    - amortization of deferred revenue         $     734,649              -
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Revenues reported                              $  19,599,570              -
Cost of sales                                  $  (4,491,131)             -
Depletion, depreciation and accretion          $  (1,483,841)             -
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Mine operating earnings                        $  13,624,598              -
Loss on derivative instruments                 $  (2,642,756) $  (2,398,952)
Other net expenses                             $  (1,186,322) $    (961,309)
Taxes                                          $  (3,725,000)             -
Exchange gain on translation to US Dollars     $     272,821  $     538,351
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Comprehensive earnings (loss)                  $   6,343,341  $  (2,821,910)
Weighted average number of common shares
 outstanding                                      87,861,072     66,927,998
Comprehensive earnings (loss) per share -
 basic                                         $        0.07  $       (0.04)
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Silver ounces sold                                   139,771         57,569
Gold ounces sold                                       9,788          2,333
Silver equivalent ounces sold (2)                    641,546        146,219
Silver ounces produced                               134,528         64,712
Gold ounces produced                                   9,405          3,152
Silver equivalent ounces produced (2)                616,668        184,483
Ag : Au Ratio (2)                                     51.2:1           38:1
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(1) Cash flow from operations before changes in working capital items.
(2) This is a Non-IFRS performance measure. Silver equivalent ounces consist
of the number of ounces of silver production plus the number of ounces of
gold production multiplied by the ratio of the spot gold price to the spot
silver price at the quarter end dates.
Variance in sold versus produced is based on carry forward inventory from Q4
2011.
(3) IFRS 18 - Revenue, states revenue should be recorded at its fair value,
which for gold and silver is the market spot price on the date revenue is
recognized.

The information in this news release should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements for the three months ended March 31, 2012 and associated MD&A which are available from the Company's website at www.silvercrestmines.com and under the Company's profile on SEDAR at www.sedar.com.

Three months ended March 31, 2012

During the quarter ended March 31, 2012, reported revenue amounted to $19,599,570 (2011 - $Nil), which included $17,776,691 (2011 - $3,810,044, capitalized) in silver and gold revenues on a cash basis, non-cash revenues of $1,088,230 (2011 - $865,038, capitalized) for adjustments to gold spot market prices related to hedge facility deliveries, and $734,649 (2011 - $180,955, capitalized) for amortization of deferred revenues related to payments under the Sandstorm Agreement. The non cash amount of $1,088,230 represents the difference between the market spot price at the date of delivery for gold (at an average realized price of $1,727.50 per ounce) and the hedge price of $926.50 per ounce settled as required by IFRS accounting policies.

Silver sales were 139,771 ounces (2011 - 57,569) at an average realized price of $32.62 (2011 - $33.32). All silver production is unencumbered and sold at spot prices.

Gold sales were 9,788 ounces (2011 - 2,333). Gold delivered into the Hedging Facility was 1,359 ounces (2011 - 1,866) at an average realized price of $925.93 (2011 - $926.15). Gold delivered to Sandstorm was 1,958 ounces (2011 - 467) at an average realized gold price of $725.29 (2011 - $737.84) for which the Company recorded revenues of $1,419,794 (2011 - $344,253, capitalized) consisting of $685,145 (2011 - $163,298) in cash received and $734,649 (2011 - $180,955) from amortization of deferred revenue. The Company sold 6,471 gold ounces (2011 - Nil) at market spot realized price of $1,720.45 (2011 - $Nil) per ounce.

Cost of sales amounted to $4,491,131 (2011 - $2,940,598 capitalized). Cash cost per silver equivalent ounce sold amounted to $7.00.

General and administrative expenses increased to $1,172,197 (2011 - $619,424) primarily due to an increase in remuneration and corporate expenditures in Vancouver and Mexico.

Loss on derivative instruments amounted to $2,642,756 (2011 - $2,398,952) using the gold forward price of $1,671 (2011 - $1,456). Under IFRS the Company's derivative instruments are fair valued at the financial position date, with the resulting gain or losses included in the operating results for the period. The derivative loss relates to the incremental fair value of the Macquarie Bank Hedging Facility, which represents the difference between the market spot price of gold at the quarter end and strike price of $926.50 per ounce.

The income tax expense of $3,725,000 (2011 - $Nil) is the estimated first quarter tax payable from Santa Elena operations.

Comprehensive earnings were $6,343,341 or $0.07 per common share compared to a comprehensive loss of $2,821,910 or ($0.04) per common share in 2011.

NON-IFRS PERFORMANCE MEASURES

The discussion of financial results in this press release includes reference to cash operating cost per silver equivalent ounce sold, which is a non-IFRS performance measure. The Company provides this measure to provide additional information regarding the Company's financial results and performance. Please refer to the Company's MD&A for the three month period ended March 31, 2012, for a reconciliation of this measure to reported IFRS results.

OUTLOOK FOR 2012

For 2012, SilverCrest's immediate focus is to continue to efficiently operate its flagship Santa Elena open pit silver and gold mine, realize the full potential and value of the Santa Elena mine by diligently implementing the three year expansion plan to double metals production, and to rapidly advance the delineation of a large polymetallic deposit at the La Joya Property. The specific targets are expected to be as follows:

Santa Elena Open Pit Production

 

--  Estimated annual production, 33,000 gold ounces and 435,000 silver
    ounces; (Q1 2012; 9,405 gold ounces and 134,528 silver ounces).
--  Expected operating costs of $18.5 million; (Q1 2012; $4.49 million
    including inventory adjustment).
--  Estimated cash operating cost of $8.20 per ounce silver equivalent sold
    (55:1 Ag:Au); (Q1 2012; $7.00 per ounce silver equivalent).
--  Estimated sustaining capital expenditure of $1.5 million, reduced from
    $2.5 million; (Q1 2012; approx $220k incurred).
--  Estimated operating cash flow in excess of $2 million per month, based
    on $1,600 per ounce of gold, $30 per ounce of silver; (Q1 2012; actual
    $4.06 million per month).

Santa Elena Expansion

 

--  Collar underground decline in January, 2012; (achieved).
--  Complete underground development, including main ramp and exploration
    drifts, of approximately 2,350meters; (commenced, Q1 2012; 200 metres).
--  Secure long lead time items for mill and initiate tank fabrication;
    (commenced).
--  Basic and detailed engineering for mill facility completed by Q1 2013;
    (commenced).
--  Complete Pre-Feasibility Study on Cruz de Mayo satellite deposit as part
    of the Expansion Plan; (commenced).
--  Complete Pre-Feasibility Study on Expansion Plan (underground and mill);
    (commenced).
--  Drill Santa Elena at along strike and depth to expand underground
    resources; (commenced).
--  Continue site exploration for further discoveries; (commenced).
--  Budgeted capital expenditure for 2012 estimated at $20 million including
    expansion plan and exploration; (Q1 2012; approx $640k incurred).

La Joya Project

 

--  Complete Phase II drilling program of approximately 80 holes: core (60)
    and reverse circulation (20) drill holes; (commenced, Q1 2012; 15 core
    holes).
--  Explore the Coloradito, Esperanza and Santo Nino targets, which are
    adjacent to the MMT; (commenced).
--  Complete revised resource estimation using Phase II results by Q4 2012;
--  $6 million budget for exploration through December 31, 2012. (Q1 2012;
    Phase II program approximately $1.21 million incurred).

N. Eric Fier, CPG, P.Eng. and Chief Operating Officer for SilverCrest Mines Inc. and Qualified Person for this news release has reviewed and approved its contents.