Santacruz Silver Provides Update on Second Quarter 2013 Operations
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug 30, 2013) - Santacruz Silver Mining Ltd. (TSX VENTURE:SCZ) (the "Company" or "Santacruz") reports on its operations for the second quarter ending June 30, 2013. The Company's financial statements and accompanying management discussion and analysis can be viewed on the Company's web site at www.santacruzsilver.com or on SEDAR at www.sedar.com.
On April 18, 2013, based upon the operating staff's assessment that the mill had demonstrated its ability to operate continually at rated capacity while maintaining forecast recoveries, the Company announced that the Rosario Mine had achieved commercial production. Such consistent mill performance, however, does not in and of itself satisfy the definition of "commercial production" for accounting purposes. As such, the Company has not reported the Rosario Mine's results of operations in its consolidated statement of loss for the second quarter but instead capitalized the operating costs less proceeds from the sale of concentrates as mine development costs.
A number of initiatives related to mine development were implemented during this quarter and will be reflected in the production levels of the fourth quarter of 2013. The initiatives were undertaken to maintain the Company's operational goal of producing 500 tons per day by the end of the first quarter 2014. Full details are available in the Company's MD&A document filed on www.sedar.com.
Arturo Préstamo, President and CEO, remarked "During our first quarter of production at the Rosario Mine, we have taken a definitive step towards our goal of achieving full operating capacity of 500 tons per day by the end of Q1 2014. Nonetheless, we encountered a number of temporary short-term production challenges. Our operational team has met these start-up challenges head on and continues to work pro-actively towards our production goal. We fully expect these initiatives to become more apparent in subsequent quarterly results while at the same time maintaining a strong treasury."
Mr. Préstamo continued "For the duration of 2013, the Rosario Mine will be in a ramp-up mode. I want to commend our operations team, led by our COO, Francisco Ramos, for constructing the Rosario milling facility on time and on budget, and for the team's continued effort to achieve our production target. We anticipate that the Rosario Mine will be cash flow positive by Q4 2013."
2013 Second Quarter Highlights Table
Production Data
| Three Months Ended June 30, 2013 | Month of July 2013 | ||
| Tons Milled - Rosario Ore* | 288 | 623 | |
| - Purchased Ore | 4,787 | - | |
| Head Grade - Rosario Ore - Ag (g/ton) | 49.46 | 78.64 | |
| - Au (g/ton) | 0.06 | 0.13 | |
| - Pb (%) | 0.279 | 0.109 | |
| - Zn (%) | 1.386 | 1.384 | |
| Head Grade - Purchased Ore - Ag (g/ton) | 131.19 | - | |
| - Au (g/ton) | 2.62 | - | |
| - Pb (%) | 0.3881 | - | |
| - Zn (%) | 0.0618 | - | |
| Recovery** - Ag (%) | 67.1 | 69.5 | |
| - Au (%) | 83.5 | 95.8 | |
| - Pb (%) | 72.0 | 73.2 | |
| - Zn (%) | 58.7 | 56.5 | |
| * | Approximately 2,000 tons of oxide material mined during this period has been stockpiled on surface until mine site staff determine if and how it can be run through the mill in a cost effective manner. |
| ** | The reported recoveries reflect the fact that oxide material was included in the mill feed. |
Qualified Person
All technical information which is included in this statement has been reviewed and approved by Donald E. Hulse P.E. of Gustavson Associates LLC. Mr. Hulse is independent of the Company and a qualified person, pursuant to the meaning of such terms in National Instrument 43-101 Standards of Disclosure for Mineral Projects.
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company with a producing project (Rosario); two advanced-stage projects (San Felipe and Gavilanes) and an early-stage exploration project (El Gachi). The Company is managed by a technical team of professionals with proven track records in developing, operating and discovering silver mines in Mexico. Our corporate objective is to become a mid-tier silver producer.
| 'signed' |
| Arturo Préstamo Elizondo, |
| President, Chief Executive Officer and Director |
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, such as planned production levels and the Company's future cash flow position, constitute "forward-looking information" as such term is used in applicable Canadian securities laws. Forward-looking information is based on plans, expectations and estimates of management at the date the information is provided and is subject to certain factors and assumptions, including, that the Company's financial condition and development plans do not change as a result of unforeseen events, that the Company obtains regulatory approval, future metal prices and the demand and market outlook for metals. Forward-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 limited to, the risk that any of the assumptions referred to prove not to be valid or reliable, that occurrences such as those referred to above are realized and result in delays, or cessation in planned work, that the Company's financial condition and development plans change, delays in regulatory approval, risks associated with the interpretation of data, the geology, grade and continuity of mineral deposits, 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 and to the Company as set forth in the Company's Annual Information Form filed under the Company's profile 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. Accordingly, the reader should not place any undue reliance on forward-looking information or statements. The Company undertakes no obligation to update forward-looking information or statements, other than as required by applicable law.
Financial outlook information contained herein about the Company's prospective cash flows and financial position is based on assumptions about future events, as described above, based on management's assessment of the relevant information currently available. The purpose of such financial outlook is to provide information about management's current expectations as to the anticipated results of its proposed business activities for the coming quarters. Readers are cautioned that any such financial outlook information contained herein should not be used for purposes other than for which it is disclosed herein.
Rosario Mine
The decision to commence production at the Rosario Mine was not based on a feasibility study of mineral reserves demonstrating economic and technical viability, but rather on a more preliminary estimate of inferred mineral resources. Accordingly, there is increased uncertainty and economic and technical risks of failure associated with this production decision. Production and economic variables may vary considerably, due to the absence of a complete and detailed site analysis according to and in accordance with NI 43-101.
