November 5, 2024
Silver X Revises Down Its All-in Sustaining Cost (“Aisc”) According to Revised Methodology
Vancouver, British Columbia, November 5, 2024 – SILVER X MINING CORP. (TSX-V: AGX) (OTCQB: AGXPF) (F: AGX) (“Silver X” or the “Company“), a growing silver producer and developer in Central Peru, is pleased to announce changes in the methodology and metrics for determining the Company’s All-In Sustaining Cost (AISC), aimed at better reflecting its operating performance and efficiency, enhancing the comparability of metrics with its peers.
To improve the accuracy and presentation of AISC calculations, Silver X refined the composition of General & Administrative Expense in sustaining cost, excluding discretionary costs for business development, investor relations and share-based compensation.
Silver X CFO David Gleit stated, “This revision in our AISC methodology provides a clearer, more accurate view of our costs and operational efficiency, enhancing transparency and aligning Silver X with industry standards. We believe this change will allow investors and stakeholders to better assess our operational performance as we continue advancing our projects in Peru.”
The following table illustrates the impact of these changes for the previously reported three-month period ended March 31, 2024, and June 30, 2024:
Table 1. Silver X Revised AISC Calculation — General and Administrative Expense
Table 2. AISC Reduction – Impact of Methodological Change
As a result of these changes, the following improvements were noted:
Sustaining Costs
- For the three-month period ended March 31, 2024, sustaining costs decreased from $1.4M to $1.1M, representing a $310,000 or 21% reduction
- For the three-month period ended June 30, 2024, sustaining costs decreased from $2.0M to $1.3M representing, a $657,000 or 33% reduction
AISC
- For the three-month period ended March 31, 2024, AISC decreased from $20.26 to $19.22 per AgEq Oz, representing a 5% reduction
- For the three-months period ended June 30, 2024, AISC decreased from $25.85 to $23.54 per AgEq Oz, representing a 9% reduction
Silver X ensures that the AISC is fully reconcilable with amounts reported under IFRS, thereby upholding transparency and compliance with financial reporting standards.
The change in methodology will be applied retroactively to the beginning of 2023.
Gross Sales Presentation
Note that reported revenues under IFRS are net of concentrate treatment and refining charges and penalties. Under the AISC methodology, these costs are added back to arrive at AISC.
In assessing operating margins, Gross Sales (before treatment and refining charges and penalties) should be compared with AISC. Going forward, AGX will report Gross as well as Net Sales to facilitate this comparison.
Non-IFRS Measures
Cash costs ($ per Oz sold) and AISC ($ per Oz sold) are non-IFRS financial measures and non-IFRS ratios in this press release. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers. Please refer to the Non-IFRS Measures section of the Company’s most recently filed Management’s Discussion and Analysis which is available on SEDAR+ at www.sedarplus.ca for full details on these measures, which is incorporated by reference into this press release.
Please see “Cautionary Note regarding Production without Mineral Reserves” at the end of this news release.
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. Heyl is a consultant for Silver X.
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.
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 20,795 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:
Susan Xu
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.
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 measures because the 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. 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. 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. 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.
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 pre-feasibility study or a feasibility study of mineral reserves demonstrating economic and technical viability. The 2025 Preliminary Economic Assessment referred to in this news release is preliminary in nature, includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that its results will be realized. 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.
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”, “targets”, “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 the timing and achievement of a 1,000 tpd run rate, expected unit cost reductions, exploration plans and results, the timing of permits, the sufficiency of the Company’s capital resources, and the production and economic outcomes contemplated by the 2025 Preliminary Economic Assessment.
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 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. 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.
