Guanajuato Silver (GSVR.V), Mexico’s fastest growing silver company operating four mines and three processing facilities, today announced year end 2022 financial results.
Production results are from the Company’s wholly owned El Cubo Mines Complex (“El Cubo“), Valenciana Mines Complex (VMC), and San Ignacio Mine (“San Ignacio“) located in Guanajuato, Mexico, and the Topia Mine (“Topia“) located in Durango, Mexico.
Here are highlights from the year ended financial statements. All figures are in US Dollars:
- Record production for 2022 of 2.15 million silver-equivalent ounces (“AgEq“); this included record production for the fourth quarter of 836,375 AgEq ounces derived from 401,244 ounces of silver, 3,907 ounces of gold, 811,492 pounds of lead and 1,261,554 pounds of zinc.(1) GSilver has delivered continuous quarter-over-quarter increases in AgEq production since the inception of precious metals processing in 2021.
- Record silver production of over one-million ounces; GSilver is a primary silver producer.
- Successful ramp-up across all four producing silver mines remains in-line with modeled expectations.
- Record revenue for 2022 of $36.8M generated by a realized average price of $21.23 per silver ounce, $1,783 per gold ounce, $0.92 per pound of lead, and $1.42 per pound of Zinc.
- Silver recoveries continue to exceed historical rates; the average silver recovery for 2022 was 86%; the average gold recovery over the same period was 84.5%.
- Cash costs of $15.84 per AgEq ounce, and AISC of $21.55 per AgEq ounce remain in-line with the Company’s projections; AISC was influenced in 2022 by significant capital expenditures during ramp-up across all four producing assets.
- Positive mine operating cash flow(7) of over $2M.
- Over 60% of the net loss for 2022 comprises either non-cash or one-time items(9); net loss for the year totaled $26.7M.
- As of December 31, 2022, the Company had cash and cash equivalents of $8,832,936 and negative working capital of $5,972,704 compared with cash of $8,234,043 and positive working capital of $1,670,108 as of December 31, 2021.
“Having achieved producer status in late 2021, we have now successfully completed our first full year of precious metals production from our expanding portfolio of silver mines in central Mexico,” said James Anderson, Chairman and CEO. “Throughout 2022 we have exceeded many of our ramp-up targets, such as very strong process plant recoveries, and consistently larger throughput volumes of mineralized material. Our Company’s rapid growth is demonstrated by our strong quarter over quarter silver and gold production increases, which we plan to accelerate throughout 2023. Our operations team remains focused on delivering even greater success for 2023 as we aim to further enhance Guanajuato Silver’s status as one of the fastest growing silver producers in Mexico.”
In terms of forward guidance, in 2023 silver equivalent production is expected to range from 4.6 to 4.8 million ounces. Consolidated cash costs per ounce are expected to be slightly lower compared to 2022; whereas AISC is expected to be similar to 2022 as the Company completes several strategic capex initiatives in 2023. These initiatives include the Topia mill expansion and modernization, the reintegration of the central Cata production shaft at Valenciana, and the installation of a dry stack tailings facility at El Cubo.
At time of writing, the stock is down -5.47% on the news, and is trading at a market cap just over $195 million.
The stock has had a major runup pre year end results. The stock broke out above a major resistance zone at $0.42 which led to a rally taking out the next resistance zone at $0.55. This is now new support and the next target zone comes in just over $0.70.
In the last few months, Guanajuato Silver announced a leading US-based institutional investor has acquired a significant equity position in the company through the purchase of approximately 24,000,000 common shares representing the majority of the equity position previously held by Great Panther Mining Ltd.
The Company also arranged a new US$5,000,000 silver and gold pre-payment facility with Swiss-based precious metals trading firm, OCIM Metals & Mining S.A.
Silver bulls should also note that a major technical trendline was broken on silver a few days ago. We are testing resistance at the major psychological $25 price level, but support comes in above $23.60. Further momentum on this breakout would also add strength to the recent rallies in silver stocks like Guanajuato Silver.
