SilverCrest Metals (US:SILV)2024-05-15 17:32Financial Data and Key Metrics Changes - The company generated revenue of $63.6 million with a cost of sales of $26.2 million, maintaining strong operating margins of approximately 60% [7][8] - Net earnings for the quarter were $33.9 million or $0.23 per share, with operating cash flow before changes in working capital at $17.6 million or $0.12 per share [8] - Treasury assets decreased by 13% or $14 million during the quarter, attributed to stronger metal prices and higher sales than planned [11][12] - The effective tax rate was lower than expected, but normalization is anticipated in 2024 [8] Business Line Data and Key Metrics Changes - Sales included 15,000 ounces of gold and 1.4 million ounces of silver, leading to silver equivalent sales of 2.6 million ounces, exceeding the plan [3] - The underground mining rates increased to 942 tons per day, while the processing plant averaged 1,026 tons per day, slightly down due to planned maintenance [15][16] - The corporate all-in sustaining cost (ASIC) was $12.90 per ounce, lower than expected due to reduced cash costs [18] Market Data and Key Metrics Changes - The company noted that metal prices were trending higher than the Q1 average, providing greater exposure to gold and silver for investors [12][26] - The company is positioned favorably in the market, with a strong balance sheet compared to peers [4] Company Strategy and Development Direction - The company is focused on infill and expansion drilling at Las Chispas, targeting inferred resources for conversion [19] - A shift towards early-stage exploration is planned for H2 2024, including regional work for nearby deposits [20] - The company is implementing a renewable energy strategy by initiating solar power usage at Las Chispas, aiming for operational cost savings and reduced greenhouse gas emissions [5][6][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting 2024 guidance of 9.8 million to 10.2 million ounces sold, with all-in sustaining costs projected between $15 and $15.90 per ounce [24] - The company anticipates strengthening its balance sheet throughout 2024, following the resolution of large one-time payments [26] Other Important Information - The company has achieved positive retained earnings of $21.5 million within six quarters of commercial production, a notable accomplishment in the mining industry [62] - The company is committed to maintaining financial flexibility to support operations and potential growth opportunities [10][40] Q&A Session Summary Question: Inquiry about the other income line related to bullion holdings - Management confirmed that part of the other income is related to bullion holdings and other derivatives [27] Question: Plans for cash deployment and potential M&A - Management emphasized the importance of maintaining a strong cash balance for flexibility, including potential share buybacks and M&A opportunities [28][29] Question: Focus on acquisitions within Mexico or diversification - Management indicated a preference for quality assets with lower risk profiles, open to opportunities both within Mexico and elsewhere [30] Question: Details on the renewable energy project - Management provided insights on the solar project, including expected cost savings of approximately $1.5 million per year and a significant reduction in greenhouse gas emissions [31][33] Question: Clarification on bullion strategy and holdings - Management reiterated the strategy of maximizing treasury holdings of gold and silver while maintaining flexibility for operational needs [38][45]