September 19, 2023
Silver X Resumes Operations at Nueva Recuperada; Provides Update on Management Transition
- Silver X announces the immediate resumption of mining operations at its Nueva Recuperada Project in Central Peru
- During the brief pause, operational upgrades were completed that expect to enhance efficiency and profitability, including investment in equipment upgrades, workforce training, and safety measures
- Freddy Mayor, has been appointed as COO and General Manager of the Company, replacing Mr. Enrique Garay
Vancouver, BC, September 19, 2023 — Silver X Mining Corp. (TSX-V: AGX) (OTCQB: AGXPF) (F:AGX) (“Silver X” or the “Company”), a rapidly expanding silver developer and producer in Central Peru, is pleased to announce the resumption of its mining operations at the Nueva Recuperada Project (“Nueva Recuperada”), effective immediately. The resumption follows a brief mining activity pause, during which the Company made operational upgrades and implemented new protocols to optimize production.
Operational Resumption Highlights at Nueva Recuperada:
- A revised production schedule targeting areas of higher certainty. The predominant source of feed will come from the Tangana 1 and Tangana 2 veins, while surface exploration of the Morlupo and Cauca veins has revealed promising high-grade areas that could significantly improve the base case.
- The recommencement of milling operations will be executed using stockpiled materials, ensuring a consistent and uninterrupted feed to the mill, thereby enhancing operational stability.
- Significant cost reductions have been achieved through a prudent reduction in headcount, the ongoing implementation of the sub-level stopping method (“SLS”), and the addition of operational measures aimed at minimizing underground transportation and mineral handling.
- A stronger alliance with the principal contractor is being established, fostering a collaborative working environment characterized by shared objectives, risk reduction, and economic incentives.
“Today marks a significant milestone in Silver X’s journey,” said José García, CEO of Silver X. “The restart of Nueva Recuperada confirms our commitment to make Nueva Recuperada a profitable operation, based on improved safety standards, efficiency, head grades and costs.”
Operational Upgrades and Importance for Investors
While mining activities were paused, the Company seized the opportunity to identify several costs reduction initiatives in key areas such as labour, mining method, mine haulage and milling efficiency. These initiatives are expected to yield improved production rates and decreased unit costs.
The new operational upgrades not only enable the mine’s production capabilities but also bolster the resilience of the business model in the face of market fluctuations. The Company is now well-positioned to execute its growth plans, establishing a strong foundation for long-term success.
FIGURE 1: Aerial View of Nueva Recuperada
Management Changes
Silver X is also pleased to announce the appointment of Mr. Freddy Mayor Zevallos as Chief Operating Officer (“COO”) and General Manager for the Peruvian subsidiary (“Recuperada SAC”) of the Company, effective immediately. Mr. Mayor takes over these roles following the resignation of Mr. Enrique Garay from his position as COO. Mr. Mayor brings over four decades of mining engineering expertise, garnered through his tenure at numerous companies in Peru. His extensive career has included significant roles such as General Manager at Hochschild Mining, Vice President for Bolivia at Glencore, and General Manager for Silver X Mining between 2019 and 2021.
Jose Garcia, CEO of Silver X Mining Corp. stated, “On behalf of our management team and Board of Directors, I extend a warm welcome to Freddy. Freddy is a distinguished mining professional, and his association with Silver X dates back to our private company days. As a key member of the founding team, Freddy is now assuming leadership of our operations to ensure the preservation of the work culture that underpinned our company’s performance in the past. We deeply appreciate Enrique Garay’s valuable contributions and insights during his time with us and wish him the very best in his future endeavors.”
Qualified Person
Mr. A. David Heyl, B.Sc., C.P.G who is a qualified person under NI 43-101, has reviewed and approved the technical content of this news release for Silver X. Mr. A. David Heyl is a consultant for Silver X.
About Nueva Recuperada Project
Nueva Recuperada, situated in Peru’s Huachocolpa Mining District, hosts the Tangana Mining Unit, comprising 230 mining concessions spanning 20,472 hectares. Silver X consolidated these concessions from Buenaventura, Pan American Silver, and Peruvian Metals, benefiting from robust local community support in this historically significant mining region. The project features a processing plant with a processing capacity of up to 720 tonnes per day, and over 60-year silver production history. The plant yields two types of concentrates, a gold/silver/lead concentrate, and a zinc concentrate. The Company is actively updating the Environmental and Social Impact Assessment (ESIA), fostering collaborative discussions with stakeholders, and reinforcing its strong social license to operate, committed to minimizing environmental impact while sharing the economic benefits of resource development with the community.
About Silver X
Silver X is a growing silver producer building a multi-asset precious metals platform in Peru. The Company’s portfolio includes the Nueva Recuperada Project, a district-scale land package of over 20,000 hectares with two mining units and more than 200 exploration targets, as well as the recently acquired Pampas Project.
With existing production, scalable expansion opportunities, and significant exploration upside, Silver X is positioned for continued growth and long-term value creation. For more information visit our website at www.silverxmining.com.
On Behalf of the Board
José M. García
CEO and Director
For further information, please contact:
Simon Willcocks
Investor Relations
NON-IFRS MEASURES
The Company has included certain non-IFRS financial measures and ratios in this news release, as discussed below. The Company believes that these measures, in addition to measures prepared in accordance with IFRS, provide investors an improved ability to evaluate the underlying performance of the Company. The non-IFRS measures and ratios are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These financial measures and ratios do not have any standardized meaning prescribed under IFRS and therefore may not be comparable to other issuers.
EBITDA and Adjusted EBITDA
“EBITDA” is comprised as income (loss) less interest, income tax and depreciation and amortization. Management believes that EBITDA is a useful indicator for investors, and is used by management, in evaluating the operating performance of the Company. See “Reconciliation of Net (Loss) / Income to Adjusted EBITDA” for a quantitative reconciliation of EBITDA to the most directly comparable financial measure.
“Adjusted EBITDA” is comprised as income (loss) less interest, income tax, depreciation, amortization, share-based compensation, foreign exchange gain (loss), and certain non‑recurring or non‑cash items where applicable. Management believes that Adjusted EBITDA is a useful indicator for investors, and is used by management, in evaluating the operating performance of the Company. See “Reconciliation of Net (Loss) / Income to Adjusted EBITDA” for a quantitative reconciliation of Adjusted EBITDA to the most directly comparable financial measure.
Cash Costs and All-In Sustaining Cost (“AISC”)
The Company uses cash costs, cash costs per AgEq ounce produced, AISC, and AISC per AgEq ounce produced to manage and evaluate its operating performance in addition to IFRS measure because Company believes that conventional measures of performance prepared in accordance with IFRS do not fully illustrate the ability of its operations to generate cash flows. The Company understands that certain investors use these measures to determine the Company’s ability to generate earnings and cash flows for use in investing and other activities. Management and certain investors also use this information to evaluate the Company’s performance relative to peers who present this measure on a similar basis.
Cash costs are calculated by starting with cost of sales, and then adding treatment and refining charges, and changes in depreciation and amortization. Total cash production costs include cost of sales, changes in ore and concentrate inventories, changes in depreciation and amortization, less transportation and other selling costs and royalties. Cash costs per AgEq ounce is calculated by dividing cash costs by the AgEq ounces produced.
AISC and AISC per AgEq ounce produced are calculated based on guidance published by the World Gold Council (and used as a standard of the Silver Institute). The Company presents AISC based on AgEq ounces produced. AISC is calculated by taking the cash costs and adding sustaining costs. Sustaining costs are defined as capital expenditures and other expenditures that are necessary to maintain current production. Management has exercised judgment in making this determination.
The following table shows the calculation of the cash costs and AISC per AgEq ounces produced and per metric tonne processed:
Cautionary Note Regarding Production without Mineral Reserves
The decision to commence production at the Nueva Recuperada Project and the Company’s ongoing mining operations as referenced herein (the “Production Decision and Operations”) are based on economic models prepared by the Company in conjunction with management’s knowledge of the property and the existing estimate of mineral resources on the property. The Production Decision and Operations are not based on a preliminary economic assessment, a pre-feasibility study or a feasibility study of mineral reserves demonstrating economic and technical viability. Accordingly, there is increased uncertainty and economic and technical risks of failure associated with the Production Decision and Operations, in particular: the risk that mineral grades will be lower than expected; the risk that additional construction or ongoing mining operations are more difficult or more expensive than expected; and production and economic variables may vary considerably, due to the absence of a detailed economic and technical analysis in accordance with NI 43-101.
Cautionary Statement Regarding “Forward-Looking” Information
This press release contains forward-looking information within the meaning of applicable Canadian securities legislation (“forward-looking information”). Forward-looking information is generally identified by words such as “plans”, “expects”, “estimates”, “intends”, “anticipates”, “believes”, or similar expressions, including statements that certain events or results “may”, “could”, “would” or “will” occur. All statements other than historical facts constitute forward-looking information, including, without limitation, statements regarding exploration plans, operating results, expected project performance, the potential for resource expansion at Tangana, the economic viability of the Tangana Mining Unit, and the Company’s expected financial performance.
Forward-looking information is based on a number of assumptions, including that general economic and business conditions will not materially worsen; commodity demand and prices will remain stable or improve; required permits and approvals will be obtained on a timely basis; operations will not be materially disrupted by accidents, labour issues or equipment failures; financing will be available; equipment and supplies will be accessible as needed; resource estimates and underlying assumptions (including size, grade and recovery) are reasonable; and the Company will be able to attract and retain qualified personnel and execute its strategic objectives.
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company, as the case may be, to be materially different from those expressed or implied by such forward-looking information, including but not limited to those risks described in the Company’s annual and interim MD&As and in its public documents filed on www.sedarplus.ca from time to time. Forward- looking statements are based on the opinions and estimates of management as of the date such statements are made. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward- looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
