Santacruz Silver reports strong financial results despite production drop in first quarter
(Kitco News) - Santacruz Silver Mining (TSX.V:SCZ) reported today that the company's Q1 2021 silver equivalent production of 706,978 ounces decreased by 22% compared to Q1 2020 (902,765 ounces). However, after adjusting for the metal price deck, the Q1 2021 silver equivalent production declined by 4% as compared to Q1 2020, Santacruz explained.
The company said that the mill throughput has experienced challenges at both the Zimapan and Rosario operations, caused by an unstable power supply from Mexico´s Comision Federal de Electricidad (Mexico´s power supply company) in February that caused damage to the electric motors for the ball mills at both milling facilities.
The matter was resolved in early March, the company added, but mill availability was materially reduced for eight days and this in turn negatively impacted tonnes of mineral material processed, silver equivalent production, silver equivalent ounces sold, revenues and gross margin at both operations.
Notwithstanding this matter, the company recorded net income of $6,518,000 for Q1 2021 (2020 – net loss of $87,000) and a gross operating profit of $2,181,000 (2020 – operating loss of $1,874,000).
CEO Carlos Silva stated, "The first quarter of 2021 has been a pivotal quarter for Santacruz as we started to see the results of our efforts to increase production at Zimapan both as to throughput tonnage and head grades as we ramp up production from the Lomo del Toro mineralized zone. We expect further improvements during the second quarter which we anticipate will lead to stronger cash flow generation."
Santacruz is a Mexican focused silver company with two producing silver projects (Zimapan and Rosario) and two exploration properties, the La Pechuga property and Santa Gorgonia prospect. The company's corporate objective is to become a mid-tier silver producer.