TSX: SIL | NYSE American: SILV
Q4, 2022 Highlights
- Commercial production declared on
November 1, 2022 , marking Q4, 2022 a ramp-up quarter. - In the quarter, recovered metal, including inventory, was 11,940 ounces ("oz") of gold ("Au") and 1.20 million oz of silver ("Ag"), or 2.23 million oz of silver equivalent ("AgEq**"). Metal poured totaled 10,896 oz Au and 1.06 million oz Ag, or 2.01 million oz AgEq.
- Powerline was fully completed in
November 2022 and the Mine is now energized by national grid power with improved stability. - Underground mining averaged 700 tonnes per day ("tpd") below the 2021 Feasibility Study forecast of 750 tpd, but in line with the revised forecast of 600 to 700 tpd (see news release dated
September 14 , 2022). - Processing plant operating metrics exceeded the 2021 Feasibility Study* for tonnage milled, plant availability and metallurgical recoveries with
December 2022 average throughput of 1,318 tpd at 95.5% availability (in line with design of 1,250 tpd at 91.3% availability). - At the end of 2022, the ore stockpiles were estimated at 261,600 tonnes below the 2021 Feasibility Study estimate of 311,200 tonnes due to a combination of higher processing rates and offset by lower mining rates than planned.
- An updated technical report ("Updated Technical Report") remains on schedule for Q2, 2023 and will form the basis for updated cost and production guidance. The 2021 Feasibility Study was based on Q3, 2020 costs which have been impacted by inflation and may also be impacted by changes to the mine plan.
- Exploration at Las Chispas focused on assisting operations with database management, grade control, drilling on new vein targets, and delineation drilling of planned mining stopes.
- Notable improvement in our 2022 Lost Time Injury Frequency Rate ("LTIFR")*** to 0.42 from 0.63 in 2021.
- Local community-based multi-year projects have advanced with a focus on water and sewage infrastructure.
Released Task Force on Climate-Related Financial Disclosure ("TCFD") and Water Stewardship Reports, inaugural ESG report to follow in 2023.- Financial position remains strong with debt refinancing completed at a lower rate and a reduction of debt outstanding by
$40.0 million . Exited 2022 with$50.8 million in cash and$50.0 million in debt.
* NI 43-101 Technical Report & Feasibility Study on The Las Chispas Project dated |
** AgEq is based on the 2021 Feasibility Study Mineral Resource and Reserve gold to silver ratio of 86.9:1 calculated using |
***based on 200,000 work hours |
Table 1: Operational Statistics
Metal Recovered and Produced
The combination of better-than-expected throughput and processing recoveries led to greater recovered and produced metal (poured metal) than planned. The variance between metal recovered and produced relates to metal inventory both in the plant and plant refinery and is largely a function of the plant ramp-up and is expected to become negligible as we stabilize the operation.
Figure 1 outlines the monthly metal recovered and processed grades since starting the processing plant in late
2022 processed grades averaged 3.05 gpt Au and 312 gpt Ag, or 577 gpt AgEq as compared to the 2021 Feasibility Study plan of 2.53 gpt Au and 254 gpt Ag, or 474 gpt AgEq. The 2021 Feasibility Study plan for the use of lower grade stockpile material during the ramp-up was amended in Q4, 2022 to include more mined ore as we benefited from better-than-expected recoveries, thereby allowing for more information to be gathered on the Mine to Plant grade reconciliation.
Figure 1: Metal Recovered
Power
At the end of
Commercial Production
Effective
Underground Mining
In 2022, an additional 8.0 km of underground development was completed at the Mine. The average mining rate for Q4, 2022 was 700 tpd, below original guidance of 750 tpd, but in line with the Company's revised guidance of 600 to 700 tpd.
A total of an estimated 201,100 tonnes of ore were mined from development and stoping activities in 2022, below the 2021 Feasibility Study projection of an estimated 214,400 tonnes. The variance was a result of lower productivity in resue mining stopes due to safety concerns and narrower vein widths in some areas. Long hole mining has progressed well and has achieved production and dilution rates as set out in the Feasibility Study.
Resue mining represented 22% of the tonnage in the 2022 mine plan and 12% in the 2021 Feasibility Study life of mine. As previously disclosed, SilverCrest decided to reduce the amount of resue mining utilized at Las Chispas, for safety and productivity reasons. In Q4, 2022, SilverCrest began converting resue stopes to cut and fill and expects to eventually convert some to longhole stopes. This has the potential to increase productivity with a lower cost mining method but could be offset by a potential increase to dilution relative to the resue method. During this period a total of nine stopes originally designated for resue mining were converted to cut and fill.
In H1, 2023 it is expected that underground mining rates will be in the range of 650 to 700 tpd as the Company continues to work with the contractor to ramp-up the mine and outline the appropriate ramp-up through 2025 for inclusion in upcoming technical report. Underground mining will be focused on capital development which was slightly behind schedule in 2022 due to availability of equipment and labour. Work is underway to rectify these challenges, but it is expected that a readjustment of the mobile fleet will be required with the decrease in resue mining.
Grade reconciliation work is advancing internally and will be included in the Updated Technical Report.
Processing Plant
Since commissioning in late
In Q4, 2022 the processing plant continued to perform well as the Company continued to ramp-up, test and understand the plant's abilities to operate at higher rates. In the quarter, approximately 104,400 tonnes of ore were processed at a grade of 3.67 gpt Au and 382 gpt Ag, or 701 gpt AgEq. The average throughput in Q4, 2022 was 1,135 tpd which compared to the 2021 Feasibility Study plan of 1,143 tpd. Metallurgical recoveries in Q4, 2022 were 96.9% for Au and 93.3% for Ag, or 95.0% AgEq and the plant operated at 92.4% availability. The main operating challenge during the period was encountered in
A total of approximately 187,600 tonnes have been processed since
Figure 2: Processing
Recoveries in 2022 tracked ahead of the planned ramp-up projections as shown in Figure 3. To date, recoveries have tracked above plan in part due to the use of higher consumables. Recoveries may vary in 2023 as SilverCrest begins to process higher grade stockpiled and mined ore, optimize consumable usage, implement cost controls, and refine operating parameters of the plant.
Figure 3: Processing Plant Recovery
Plant availability has continued to increase since the start of commissioning (Figure 4), with availability in
Figure 4: Processing Plant Availability
While the processing plant ramp-up has generally been trending favorably when compared to the 2021 Feasibility Study ramp-up projections, minor modifications have been required through the circuit. The main changes were related to lower dissolved oxygen and premature failure of components in the tailing filters. While the Ausenco construction mandate was completed, they, along with the equipment suppliers, have been supportive in correcting these operational issues.
Costs
2022 was a construction and ramp-up year, and having only reached commercial production on
Throughout the transition to commercial production, costs across the operation have been impacted by the global inflation trend. Since the 2021 Feasibility Study estimated costs from a Q3, 2020 basis,
Stockpiles
At the end of 2022, the stockpiles were estimated at 261,600 tonnes below the 2021 Feasibility Study estimate of 311,200 tonnes due to a combination of higher processing rates offset by lower mining rates than planned.
The surface stockpiles remain a unique asset that will comprise a significant amount of the tonnage going to the plant in the early years of the mine life. The stockpiles provide flexibility during the ramp-up of the underground mine. The updated stockpile plan will be determined in conjunction with the rate of tonnes mined and the conclusions will be released in the Updated Technical Report.
Updated Technical Report
SilverCrest continues to advance the work required to complete the Updated Technical Report in Q2, 2023. This report will incorporate updated Mineral Resources and Reserves, updated metallurgical results, Mine to Plant reconciliation (mine, stockpile, and plant) including comparison to the 2021 Feasibility Study Mineral Resource estimate, a revised mine plan, and updated operating and sustaining costs arising from any potential changes to the mine plan and the impact of inflation from the Q3, 2020 cost base used in the 2021 Feasibility Study.
Safety, COVID-19, and Community
Safety remained a top priority at Las Chispas throughout 2022 and this focus resulted in an improvement in our main safety metrics, LTIFR and total recordable injury frequency rate ("TRIFR"). SilverCrest exited 2022 with an LTIFR of 0.42 and TRIFR of 3.58 per 200,000 work hours, an improvement from the end of 2021 rates of 0.63 and 4.11, respectively.
In Q4, 2022 the Company released its TCFD report and water stewardship plan. These reports focused on identifying and managing the key risks and opportunities for our stakeholders and helped in developing a multi-year major water infrastructure project that is focused on improving the sewage system and the water infrastructure for the local community, ranching, and farming industries. This investment, which began in 2022, includes upgrades to three main infrastructure areas which were considered priorities in discussion with the local community, and will continue in 2023.
Q4, 2022 and 2023 Exploration
In the quarter, exploration at Las Chispas focused on assisting operations with database management, grade control, drilling on new veins targets and delineation drilling of planned mining stopes.
For 2022, exploration at Las Chispas focused on the transition to production through further infill and delineation drilling of planned mining stopes. Results of drilling completed to the end of
The Company's 2023 exploration budget will remain conservative until details from the Updated Technical Report emerge and will be evaluated on a half year basis. The H1, 2023 budget is approximately
Financial Position
As of
The Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects for this news release is
ABOUT
SilverCrest is a Canadian precious metals producer headquartered in
FORWARD-LOOKING STATEMENTS
This news release contains "forward-looking statements" and "forward-looking information" (collectively "forward-looking statements") within the meaning of applicable Canadian and
Chief Executive Officer
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