Guanajuato Silver Company Ltd. ("GSilver") (TSXV:GSVR) (OTCQX:GSVRF) (AQSE:GSVR) is a precious metals producer engaged in reactivating past producing silver and gold mines near the city of Guanajuato, Mexico, which has an established 480-year mining history. With five mines and three processing facilities, the Company is one of the fastest growing silver producers in Mexico.
On November 29 Guanajuato Silver announced their consolidated Q3 production results from their silver production assets. Financial highlights included:
- Record Production: 700,264 silver equivalent ("AgEq") ounces, up 107% from Q2 2022. Total production consisted of 329,298 ounces of silver, 3,226 ounces of gold, 537,608 pounds of lead and 677,127 pounds of zinc.
- Cash Costs: $13.86 per AgEq ounce representing a decrease of 19% compared to Q2.
- All-in Sustaining Costs ("AISC"): $19.53 per AgEq ounce, also a 19% decrease compared to Q2.
- Cash on Hand: At quarter end, the Company had cash of $6,365,025.
- Opportunistically purchased Silver and Gold: At depressed prices to use to extinguish a portion of the OCIM loan payment requirements.
- Cost per tonne: increased 48% for the quarter because of the addition of the Topia Mine, where the mining of narrow, exceptionally high-grade veins requires a number of changes to mining and milling method, especially to reduce dilution.
With operating results trending in the right direction, GSVR arranged a US$ 5M debt facility on December 8. signed a new concentrate and pre-payment credit facility with Ocean Partners (UK) Limited ("Ocean Partners"), a UK based metals offtake and trading firm, to provide a US$5.0M revolving credit facility (the "New Facility") for operating and working capital purposes. The New Facility is in addition to the Company's existing US$5.0M credit facility advanced by Ocean Partners in August 2022
Additional to the debt facility, GSVR also announced an equity financing of up to C$7.5M at a price of C$0.425, subject to a minimum offering of C$3.0M.
Chairman and CEO James Anderson said, "Over the last two years the Company has purchased premium Mexican silver assets at rock-bottom prices. As we continue to ramp up production at our four producing silver mines, and as the silver price continues to gradually increase, we are acting now to strengthen our balance sheet in order to deploy targeted capex where it can have the most impactful returns on investment."
Proceeds from the Offering will be used to:
- Ramp up production at the Company's existing mines in and around Guanajuato, Mexico including El Cubo, San Ignacio and Valenciana;
- Expand and modernize the processing facilities at the Topia mine in Durango, Mexico; with a view to increasing monthly milling capacity from 7,500 tonnes to approximately 10,000 tonnes per month;
- Increase brownfields exploration programs across all projects, with particular emphasis at the Valenciana and San Ignacio mines; and
- Fund general working capital expenses and strengthen Guanajuato Silver's balance sheet.
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