VANCOUVER, Aug. 12, 2015 /CNW/ - SilverCrest Mines Inc. (the "Company" or "SilverCrest") is pleased to announce its consolidated interim financial results for the second quarter ("Q2") ended June 30, 2015. All financial information is prepared in accordance with International Financial Reporting Standards ("IFRS") and all dollar amounts are expressed in U.S. dollars unless otherwise specified. The information in this news release should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2015 and associated management discussion and analysis ("MD&A") which are available from the Company's website at www.silvercrestmines.com and under the Company's profile on SEDAR at www.sedar.com.

J. Scott Drever, Chief Executive Officer, stated; "The second quarter was another successful quarter for SilverCrest. Santa Elena's record Q2 AgEq (3) production delivered strong financial results despite the lower precious metals price environment. We generated cash flow from operations (1) (2) of $8.1 million ($0.07 per share) and net earnings of $3.86 million ($0.03 per share). We maintained a strong balance sheet at June 30, 2015 with $36.4 million in cash and cash equivalents and working capital of $51.0 million. For Q2, 2015, our cash operating cost (1) (2) was $8.05 per AgEq (3) ounce sold and our all-in sustaining cash cost(2) was $10.97 per AgEq (3) ounce sold. Due to the strong performance in Q2, 2015 and continuing operational improvements, SilverCrest increased its 2015 corporate production guidance to a range of 4.7 – 5.1 million AgEq (3) ounces. The Company has reduced its 2015 operating cash cost range to $9 – $10 per AgEq ounce from $10 – $11 per AgEq ounce and all-in sustaining cash cost range to $12 – $13 per AgEq ounce from $14 – $15 per AgEq ounce. Our cash operating numbers continue to make us one of the lowest cost precious metal producers."

FINANCIAL HIGHLIGHTS OF Q2, 2015, COMPARED TO Q2, 2014

Cash flow from operations (1) (2) was $8.05 million ($0.07 per share, basic and diluted), an increase of 163%.
Cash operating cost per AgEq ounce sold (2) (3) was $8.05, an increase of 13%.
All-in sustaining cash cost per AgEq ounce sold (2) (3) was $10.97, a decrease of 7%.
Revenues increased 169% to $20.7 million.
Metal sales of 515,070 ounces of silver and 11,567 ounces of gold increased 216% and 144%, respectively.
Realized average spot metal prices declined from $19.67 to $16.54 (16%) for silver and from $1,296 to $1,202 (7%) for gold.
Net earnings increased 194% to $3.86 million ($0.03 per share, basic and diluted).
Adjusted earnings (2) increased 361% to $4.5 million ($0.04 per share, basic and diluted).
Cash and cash equivalents totalled $36.4 million, compared to $40.1 million (at June 30, 2014).
Working capital was $51.0 million, compared to $44.5 million (at June 30, 2014).
Metal inventory included 247,841 (Q2, 2014 – 69,000) ounces of silver and 5,090 (Q2, 2014 – 1,330) ounces of gold.
Scotiabank Credit Facility: Drawdown – $15.0 million; Available – $5.0 million.

FINANCIAL AND OPERATING HIGHLIGHTS: Q2 2015 Q2 2014 H1 2015
Cash flow from operations (1) (2) $8,051,663 $3,062,502 $15,306,878
Cash flow from operations (1)(2) per share $0.07 $0.03 $ 0.13
Cash operating cost per silver equivalent ounce sold (2) (3) $ 8.05 $ 7.12 $ 8.26
All-in sustaining cash cost per silver equivalent ounce sold (2) (3) $ 10.97 $ 11.73 $ 11.11
Revenues $20,731,379 $7,719,057 $40,243,739
Cost of sales $(10,356,202) $(3,046,958) $(20,513,700)
Depletion, depreciation and amortization $(3,080,939) $(1,577,897) $ (6,094,373)
Mine operating earnings $7,294,238 $3,094,202 $13,635,666

Other net expenses $(1,957,067) $(2,050,358) $(3,792,299)
Foreign exchange (loss) gain $(224,611) $34,506 $(558,226)
Tax recovery (expense) $(1,246,000) $236,000 $(2,907,000)

Net earnings and comprehensive earnings $3,866,560 $1,314,350 $ 6,378,141

Weighted average number of common shares outstanding 118,753,205 118,728,205 118,753,205
Earnings per share – basic $0.03 $0.01 $0.05
Earnings per share – diluted $0.03 $0.01 $0.05
Adjusted earnings (2) $4,459,047 $996,783 $8,477,010
Adjusted earnings per share (2) $0.04 $0.01 $0.07
Silver ounces sold 515,070 163,026 928,320
Gold ounces sold 11,567 4,743 23,315
Silver equivalent ounces sold (3) 1,286,589 479,384 2,483,431
Ag : Au Ratio (3) 66.7:1 66.7:1 66.7:1
(1) Cash flow from operations before changes in working capital items.
(2) These are Non-IFRS performance measures. Refer to "CAUTIONARY NOTE REGARDING NON-IFRS PERFORMANCE MEASURES".
(3) Silver equivalent ("AgEq") ratio for Q2, 2015 of 66.7:1 was calculated using metal prices of $1,200/oz for gold and $18/oz for silver. For consistency with, comparative periods, the AgEq ratio reported during 2014 was changed from 60:1 to 66.7:1. All numbers are rounded.
Comparison of the three months ended June 30, 2015 to June 30, 2014

Net earnings were $3,866,560 ($0.03 per share basic and diluted) for the second quarter compared with $1,314,350 ($0.01 per share basic and diluted) in the second quarter of 2014. The increase in net earnings in the second quarter was primarily attributed to a significant increase in ounces produced and sold, relating from the transition from an open pit heap leach operation to an underground mining and milling operation. Q2, 2015 production was also assisted by better silver and gold recoveries which increased from Q1, 2015 from 60% to 74% and 91% to 96% respectively. These positive aspects were partially offset by lower realized metal prices, higher operating costs and an increase in taxes compared to Q2, 2014.

Silver and gold revenue amounted to $20,731,379 (2014 – $7,719,057) in the second quarter. Silver sales totalled 515,070 ounces (2014 – 163,026), 216% higher than the same period in 2014. The foregoing silver sales, combined with a 16% lower average realized price of $16.54 (2014 – $19.67) per ounce, resulted in 166% more silver revenue. Total gold revenue in the second quarter increased 124% compared to the same period in 2014. Total gold sales were 11,567 ounces (2014 – 4,743) or 144% above 2014. The Company sold 8,908 (2014 – 3,794) ounces of gold at an average realized price of $1,202 (2014 – $1,296) per ounce, a 7% decline, and delivered 2,659 gold ounces (2014 – 949) under the Sandstorm Purchase Agreement for cash of $357 (2014 – $354) per ounce.

Cost of sales amounted to $10,356,202 (2014 – 3,046,958). Cash operating cost and all-in sustaining cash cost per AgEq ounce sold in Q2, 2015 were $8.05 and $10.97 (Ag: Au 66.7:1) per ounce, respectively, compared to $7.12 and $11.73 (Ag: Au 66.7:1) per ounce in the comparable 2014 quarter. The increase in cash operating cost per AgEq ounce sold for Q2, 2015, is a result of additional direct production costs related to the transition of Santa Elena during 2014 from an open pit heap leach operation to an underground mining and milling operation. The cost increases were partially offset by the benefit of a weaker Mexican Peso. All-in sustaining cash operating cost per AgEq ounce sold decreased from $11.73 to $10.97 primarily from the benefit of a weaker Mexican Peso. Cash operating costs for Q2, 2015 experienced a favorable foreign exchange effect, as the quarterly average Mexican Peso weakened against the U.S. Dollar by 18% compared to Q2, 2014. Approximately 50% of Q2, 2015 cash operating costs are in Mexican Pesos. (Refer to "Cautionary Note Regarding Non-IFRS Performance Measures").

Depletion, depreciation and amortization increased to $3,080,939 (2014 – $1,577,897) with the incorporation of a depletion charge for the underground mine and depreciation charges for Santa Elena's mill and CCD/MC processing facilities that were not recorded in Q2, 2014.

Deferred tax expense amounted to $785,000 (2014 – recovery $715,000). Deferred tax arises due to differences between the financial statement carrying amounts and the respective Mexican tax bases. The primary reasons for the significant change with the comparative quarter in 2014 are 1) taking an income tax deduction for capitalized underground development costs incurred at Santa Elena and 2) a reduction in the carrying value of the Mexican tax bases due to the weakening Mexican Peso.

Proposed Transaction with First Majestic

As announced on July 27, 2015, the Company entered into a definitive agreement ("Arrangement") with First Majestic whereby First Majestic will acquire all of the issued and outstanding shares of SilverCrest for consideration of 0.2769 common shares of First Majestic plus CAD$0.0001 in cash, and 0.1667 common shares of New SilverCrest for each SilverCrest common share held. The transaction excluding New SilverCrest equated to a 37% premium to the SVL share price as of the date of the Arrangement and a 21.4 % ownership in First Majestic by SilverCrest shareholders. In addition to ownership in First Majestic, SilverCrest shareholders will benefit from First Majestic's liquidity in the market place, diversity provided by six operating mines, and management's long history of successful operations in Mexico. A meeting of SilverCrest shareholder's has been called for September 25, 2015 to seek approval for the transaction with closing expected to occur in early October.

OPERATIONAL UPDATE

As of July 31, 2015, the Santa Elena Mine has generally been performing better than operating numbers reported for the first half ("H1"), 2015. Currently, the average underground ore mining rate is 1,200 tonnes per day. Average milling rate is 3,000 tonnes per day with a planned blend of mill feed of 40% underground and 60% leach pad ore. The most significant operational improvement is the increase in silver recoveries from a H1, 2015 average of 68% to a current recovery rate of 85%. Recovery increase is attributed to injection of oxygen and lead nitrate into processing leach tanks. The current annual budget estimate for silver recoveries is 70%.