SilverCrest Metals Inc. (SILV) Q3 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary highlights strong financial performance with increased revenue, operating cash flow, and free cash flow. The company anticipates exceeding sales and cost guidance, which is a positive indicator. The Coeur transaction offers an 18% premium, adding shareholder value. Despite some operational risks and competitive pressures, the overall sentiment is positive, supported by strong financial metrics and optimistic guidance. The market cap suggests moderate sensitivity to these positive developments, leading to a prediction of a positive stock price movement of 2% to 8%.
Key Financial Performance
Revenue $80.4 million, an increase from previous year (exact figure not provided) due to strong operational performance.
Mine Operating Earnings $47 million, reflecting strong operational performance and contributing to high operating margins.
Operating Cash Flow $44.2 million or $0.30 per share, indicating robust cash generation.
Free Cash Flow $36.2 million or $0.24 per share, a 49% increase from Q2, showcasing strong operational performance.
Treasury Assets $158.2 million, a 29% increase or $35.9 million over Q2, due to strong cash flow and bullion purchases.
Bullion Holdings $37.4 million, a 56% increase from $24 million at the end of Q2, driven by purchases and mark-to-market increases.
Cash Cost $8.85 per ounce, closely aligning with Q2's costs, indicating cost control.
All-in Sustaining Costs (AISC) $13.72 per ounce, decreased from Q2 due to lower planned sustaining capital.
Year-to-Date Cash Cost $8.28 per ounce, reinforcing expectations for annual cash costs to fall below guidance.
Year-to-Date AISC $14.50 per ounce, positioning below the low end of guidance.
Sustaining Capital Expenditures $33.4 million through Q3, expected to finish closer to the top end of guidance of $40 million to $44 million.
Exploration Expenditures $11.5 million year-to-date, positioning to finish at the top end of guidance of $12 million to $14 million.
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Operating Highlights
Transaction with Coeur Mining: SilverCrest announced a transaction with Coeur Mining, representing an 18% premium on the announcement, which is expected to deliver value to shareholders.
Free Cash Flow: Q3 2024 saw a free cash flow of $36.2 million, a 49% increase from Q2.
Treasury Assets: Treasury assets increased by 29% to $158.2 million, with a significant jump in bullion holdings.
Underground Mining Rates: Underground mining rates increased to approximately 1,350 tons per day, above plan.
Cash Costs: Third quarter cash cost was $8.85 per ounce, aligning closely with Q2's costs.
All-in Sustaining Costs (AISC): Corporate AISC decreased to $13.72 per ounce, below the low end of guidance.
Safety Milestone: Achieved 500 days with no lost time incidents at the plant.
Exploration and ESG Initiatives: Continued drilling at Las Chispas for resource growth and released second annual ESG report focusing on sustainability and community initiatives.
Solar Power Integration: Permitting process underway to incorporate solar power at Las Chispas, expected to integrate by Q1 2025.
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Risk or Challenges
Competitive Pressures: The company faces competitive pressures in the silver mining sector, which may impact its market position and profitability.
Regulatory Issues: The permitting process for incorporating solar power at Las Chispas is underway, indicating potential regulatory challenges that could affect timelines and operational plans.
Supply Chain Challenges: The reliance on two mining contractors to manage single-asset risk suggests potential supply chain challenges that could arise from contractor performance or availability.
Economic Factors: Fluctuations in bullion prices can significantly impact the company's treasury assets and overall financial performance, as evidenced by the recent mark-to-market increase.
Operational Risks: As a single-asset company, operational risks are heightened, particularly if any issues arise at the Las Chispas plant, which could affect production and financial results.
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Guidance & Outlook
Treasury Assets: Increased by 29% or $35.9 million over Q2 to $158.2 million.
Bullion Holdings: Grew 56% to $37.4 million, including a $10.3 million purchase of gold and silver bullion.
Operational Flexibility: Maintaining two mining contractors through Q1 2025 to manage single-asset risk.
Exploration Expenditures: Year-to-date expenditures of $11.5 million, expected to finish at the top end of 2024 guidance of $12 million to $14 million.
Solar Power Integration: Permitting process underway for solar power at Las Chispas, expected integration in Q1 2025.
2024 Sales Guidance: Confident in ability to meet or possibly beat 2024 sales guidance.
Cash Cost Guidance: Expect annual cash costs to fall below the low end of 2024 guidance of $9.25 to $9.75 per ounce.
All-in Sustaining Cost Guidance: Expect to finish below the low end of guidance of $14.90 to $15.75 per ounce.
Sustaining Capital Expenditures: Expected to finish closer to the top end of 2024 guidance of $40 million to $44 million.
Transaction Closure: Expected to close the Coeur transaction in late Q1 2025.
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Shareholder Return Plan
Bullion Holdings Increase: During the quarter, we purchased an additional $10.3 million of gold and silver bullion. Our total bullion position also benefited from a $3 million mark-to-market increase due to strong metal prices, growing 56% to $37.4 million at the end of the quarter.
Free Cash Flow: Free cash flow for the quarter was $36.2 million, an impressive 49% increase from Q2.
Treasury Assets: Treasury assets increased by 29% or $35.9 million over the second quarter to end the quarter at $158.2 million.
Coeur Mining Transaction: The agreement with Coeur Mining for acquisition represented an 18% premium on the announcement, which is expected to deliver value to shareholders.
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Key Q&A
Q:Do you anticipate any tax cost savings in the Coeur transaction relative to possibly consolidating Coeur's Mexican mine, the Palmarejo mine?
A:It's premature for us to comment on that. Certainly, I believe those opportunities may exist, but that's ultimately going to be the focus of integration work.
Q:Who is the director on SilverCrest, the additional director, that's going to go over to the Coeur consolidation?
A:We're working on an integration plan right now... so we don't have an answer for you right now.
Q:Is major management of SilverCrest going to become much more active in Coeur?
A:We're working on an integration plan right now... so we don't have an answer for you right now.
Q:Review of Unclear Management Responses
A:Management did not provide direct answers regarding tax cost savings and the new director for the Coeur consolidation, indicating that it is premature to comment on these matters.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CEO Director
Cliff Lafleur
Interim
Mexico
Slide
ability
capital expenditure
cash cost
cost ounce
cost saving
culture
date
dedication
director
drilling
expectation
incident
increase
integration
milestone
month
operation
opportunity
ounce capital
position
power Las
question Instructions
record mine
safety
silver currency
sir
tax cost
team
test
throughput
ton day
transaction
value
work
SILV Transcript
SilverCrest Metals Inc. (SILV) Q3 2024 Earnings Call Transcript
Positive11-13
The earnings call summary highlights strong financial performance with increased revenue, operating cash flow, and free cash flow. The company anticipates exceeding sales and cost guidance, which is a positive indicator. The Coeur transaction offers an 18% premium, adding shareholder value. Despite some operational risks and competitive pressures, the overall sentiment is positive, supported by strong financial metrics and optimistic guidance. The market cap suggests moderate sensitivity to these positive developments, leading to a prediction of a positive stock price movement of 2% to 8%.
SilverCrest Metals, Inc. (SILV) Q2 2024 Earnings Call Transcript
Neutral8-8
SilverCrest Metals Inc. (SILV) Q1 2024 Earnings Call Transcript
Positive5-15
The earnings call summary indicates strong financial performance with high margins and positive net earnings. The company is strategically maintaining flexibility in treasury holdings and share buybacks. The Q&A session reveals management's cautious approach to acquisitions and a promising renewables project. Despite some uncertainties in exploration and acquisition details, the overall sentiment is positive due to strong operating results, strategic financial management, and optimistic future prospects. Given the company's small-cap status, these factors are likely to lead to a positive stock price movement over the next two weeks.
SilverCrest Metals Inc. (SILV) Q4 2023 Earnings Call Transcript
Neutral3-11
SILV Report
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