Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SilverCrest Metals Inc (SILV, Financial) reported record revenue of $80.4 million and mine operating earnings of $47 million, with an exceptional operating margin of 59%.
- The company achieved a 29% increase in treasury assets from Q2, ending the quarter with nearly $160 million in treasury assets and a debt-free balance sheet.
- Las Chispas demonstrated strong operational performance, with underground mining rates increasing to approximately 1,350 tonnes per day, above plan.
- The company maintained impressive cost control, with cash costs of $8.85 per ounce and all-in sustaining costs of $13.72 per ounce, both below the low end of 2024 guidance.
- SilverCrest Metals Inc (SILV) achieved a significant safety milestone of 500 days with no lost time incidents, reflecting a strong safety culture at Las Chispas.
Negative Points
- Processed grades at Las Chispas were lower than Q2 due to planned feed blending, which could impact future production metrics.
- The company is a single-asset operation, which poses a risk in terms of operational flexibility and diversification.
- There is uncertainty regarding potential tax cost savings and integration plans following the announced transaction with Coeur Mining.
- Sustaining capital expenditures are expected to reach the top end of the 2024 guidance, which could impact future cash flow.
- The integration of solar power at Las Chispas is still in the permitting process, with implementation expected in Q1 2025, indicating potential delays in sustainability initiatives.
Q & A Highlights
Q: Do you anticipate any tax cost savings in the Coeur transaction relative to possibly consolidating Coeur's Mexican mine, the Palmarejo mine, to decrease the percentage of profits going out in taxes? Also, who is the director from SilverCrest that will join Coeur, and will SilverCrest's management become more active in Coeur?
A: N. Eric Fier, CEO, stated that they are currently working on an integration plan with Coeur, which includes addressing the director and management roles moving forward. Rob Doyle, Interim CFO, mentioned that it is premature to comment on tax synergies, but they believe opportunities may exist and will be a focus of integration work in the coming months.
Q: What are the financial highlights from Q3 2024?
A: Rob Doyle, Interim CFO, reported record revenue of $80.4 million and record mine operating earnings of $47 million, with operating margins of 59%. Adjusted net earnings were $26.3 million or $0.18 per share. Cash flow generation was robust, with operating cash flow of $44.2 million or $0.30 per share, and free cash flow of $36.2 million or $0.24 per share, marking a 49% increase from Q2.
Q: How did SilverCrest's treasury assets perform in Q3 2024?
A: Christopher Ritchie, President, noted a 29% increase in treasury assets, amounting to $158.2 million by the end of the quarter. The company purchased an additional $10.3 million of gold and silver bullion, with bullion holdings growing 56% to $37.4 million due to strong metal prices.
Q: What were the operational highlights at Las Chispas in Q3 2024?
A: Cliff Lafleur, VP of Operations, reported that underground mining rates increased to approximately 1,350 tonnes per day, exceeding plans. The plant averaged 1,324 tonnes per day, with recoveries at 98.4%. Cash costs were $8.85 per ounce, aligning closely with Q2, and all-in sustaining costs were $13.72 per ounce, decreasing from Q2.
Q: What are the future plans for Las Chispas and the Coeur transaction?
A: N. Eric Fier, CEO, mentioned ongoing exploration for resource growth and the integration of solar power at Las Chispas by Q1 2025. The Coeur transaction is expected to close in late Q1 2025, with continued focus on operational execution and transaction-related activities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
