Precious Metals

Santacruz Silver Mining Ltd. reports on its financial and operating results for the fourth quarter of 2017.

Santacruz Silver Mining Ltd. (TSXV:SCZ)reports on its financial and operating results for the fourth quarter (“Q4”) of 2017 and for the 2017 fiscal year.

Highlights are as follows:

Operational Results and Costs
Veta Grande Project
Due to the fact that the Veta Grande Project only commenced commercial production on October 1, 2016 the following discussion compares Q4 2017 to Q4 2016 as a year-over-year comparison would not be relevant.

In Q4 2017 silver equivalent production from the Veta Grande Project decreased by 35 percent (35,386 ounces) compared to Q4 2016.  The decrease reflects a 32 percent decrease in tonnes milled largely caused by the temporary milling suspension imposed by PROFEPA in November 2017.  As compared to silver equivalent production in Q3 2017, the Q4 2017 production decreased by 37 percent, again largely due to the temporary milling

In Q4 2017 the cash cost of production per tonne of mineralized material processed decreased by 8 percent to US$67.85/t as compared to Q4 2016.  The Q4 2017 unit cost would have been lower if not for the temporary suspension of milling operations for most of November 2017 pursuant to an order from PROFEPA.

Cash cost of production per silver equivalent ounce sold during Q4 of 2017 increased by 22 percent in 2017 to US$36.18 an ounce as compared to US$29.66 an ounce in 2016.  As with the unit cost of production per tonne the Q4 2017 results were negatively impacted by the temporary suspension of milling activities in November pursuant to an order from PROFEPA. Further, the cash cost of production per silver equivalent ounce sold also reflects a combination of lower grade zinc and lead mineralized material being processed in Q4 2017 together with lower metal recoveries for gold, lead and zinc being realized as compared to 2016.  The primary source of mill feed in Q4 2017 was mineralized material from previously mined stopes.  This material ultimately proved to have an inconsistent head grade resulting in an overall lower head grade than expected.

All-in sustaining cash cost of production per silver equivalent ounce sold increased by 38% in Q4 2017 to US$43.62 an ounce as compared to US$31.65 an ounce in 2016.  This increase in unit costs occurred largely for the same reasons as described above with respect to the cash cost of production per silver equivalent ounce sold.

Rosario Project
2017 Annual Results
In 2017 silver equivalent production from the Rosario Project decreased by 47 percent (385,765 ounces) compared to 2016.  The decrease reflects a 14 percent decrease in tonnes milled combined with a 66 percent decrease in silver head grade. The decreased tonnage milled reflects inconsistent availability of mining equipment due to mechanical failures that were not remedied on a timely basis because of working capital constraints. The decreased head grade is the result of greater than anticipated mining dilution at the Cinco Estrellas Property and an extended period during which development material was the primary source of mineralized material being fed to the mill from the Membrillo Prospect. Currently sufficient development has been completed that mineralized material sent to the milling facility will be sourced from mining stopes.  The mining dilution experienced at the Cinco Estrellas Property led to management’s decision to suspend operations there during Q4 2017.  Similarly, management suspended operations in Q4 at the Rosario Mine pending further exploration programs to develop additional resources.

Cash cost of production per tonne of mineralized material processed decreased by 11 percent in 2017 to US$72.38 a tonne as compared to US$81.17 a tonne in 2016.  This positive change in unit costs reflects cost savings measures implemented by management during 2017.

Cash cost of production per silver equivalent ounce sold increased by 79 percent in 2017 to US$21.83 an ounce as compared to US$12.18 an ounce in 2016.  This change in unit costs reflects in part a decrease of 66 percent in the silver grade of the mineralized material processed offset by a 28 percent reduction in cash costs of production.  The decrease in head grade is for the reasons referenced above.

All-in sustaining cash cost of production per silver equivalent ounce sold increased by 69 percent in 2017 to US$26.03 an ounce as compared to US$15.42 a tonne in 2016.  This change in unit costs occurred largely for the same reasons as the cash cost of production per silver equivalent ounce sold increases as described above.

Click here to read the full Santacruz Silver Mining Ltd. (TSXV:SCZ) press release.

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