Tahoe Chief Executive Officer
Highlights for the second quarter of 2014 include (all amounts in U.S. dollars unless otherwise stated):
-- Revenue of
$104.7 milliongenerated from concentrate sales at operating costs of $48.2 millionresulted in earnings from mine operations of $56.5 million. -- Net earnings for the quarter amounted to $36.1 millionor $0.25per share. -- Operating cash flow before changes in working capital was $58.9 millionor $0.40per share. -- Silver production amounted to 5.8 million ounces at a total cash cost of $5.65per ounce and an all-in sustaining cost of $8.04per ounce produced, net of by-product credits. -- First half production was 9.9 million silver ounces. -- Realized price of silver from concentrate sales averaged $20.82per ounce. -- Cash and equivalents at quarter-end were $51.5 million.
Production at the Escobal mine continued to ramp-up through the quarter, achieving the 3500 tonne per day (tpd) target. Mill throughput averaged 3,419 tpd in the second quarter, reaching an average throughput of 3,709 tpd in June and 3,788 tpd in July. In the first half of 2014, 584,784 tonnes of feed were processed through the mill.
Tahoe President and Chief Operating Officer
With only a small percentage of the deposit mined, preliminary reconciliation indicates silver grade and silver ounces mined to date are approximately one percent greater than predicted by the 2012 Escobal resource model. Silver recoveries to concentrates have met expectations at 86.5% year-to-date and 88.1% during the second quarter.
2014 Feasibility Study
The 4500 tpd feasibility study to establish Escobal's Proven and Probable reserves is expected to be completed and released by the fourth quarter. Paste plant modifications, underground development and the addition of a fourth tailing filter are all in process.
Pursuant to the original agreement with its lender, the Company has opted to extend the term of the original
Corporate Social Responsibility
With the successful and profitable startup of Escobal, MSR is a significant contributor to
Further details of the many community programs administered in
Concurrent reclamation of the dry stack tailings facility at Escobal is now in full operation. Tailings are filtered to remove moisture, placed in the dry stack tailings facility and compacted to insure permanent stability. This process eliminates a water impoundment behind a dam, as seen in traditional storage facilities, which allows the facility to be reclaimed simultaneously with production over the life of the mine and mitigates environmental impacts at the earliest possible point in the mine life.
Tahoe's senior management will host a conference call to discuss the second quarter results on
Complete financial results, the Company's management discussion and analysis, and other filings will be filed on SEDAR (www.sedar.com) and the Company's website (www.tahoeresourcesinc.com).
Tahoe's strategy is to responsibly operate the Escobal mine to world standards, to pay significant shareholder dividends and to develop high quality precious metals assets in the
Qualified Person Statement
This news release has been approved by
Investors are cautioned that the Preliminary Economic Assessment (PEA) is considered preliminary in nature and includes mineral resources, including 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. Mineral resources that are not mineral reserves have not yet demonstrated economic viability. Due to the uncertainty that may be attached to mineral resources, it cannot be assumed that all or any part of a mineral resource will be upgraded to mineral reserves. Therefore, there is no certainty that the results concluded in the PEA will be realized.
The Company has not based its production decision on a feasibility study of mineral reserves demonstrating economic and technical viability, and as a result, there may be an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a commercially mineable deposit.
The Company has included certain non-Generally Accepted Accounting Principles (GAAP) financial measures throughout this document. "Total Production Cost" and "Total Cash Cost" were divided by the number of silver ounces contained in concentrate to calculate per ounce figures. These measures are not defined under International Financial Reporting Standards (IFRS) and should not be considered in isolation. The Company's primary business is silver production with other metals (gold, lead and zinc) produced simultaneously in the mining process. The value of these metals represents a low percentage of the Company's revenue and is considered by-product. When deriving the production costs associated with an ounce of silver, the Company deducts by-product credits from gold, lead and zinc sales, which are incidental to producing silver. The Company believes these measures will provide investors and analysts with useful information about the Company's underlying cash costs of operations, the impact of by-product credits on the Company's cost structure and its ability to generate cash flow, as well as a meaningful comparison to other mining companies. Accordingly, these measures are intended to provide additional information and should not be substituted for GAAP measures.
The Company reports total production costs and total cash costs on a silver ounces produced basis. The Company follows the recommendation of the
The Company has also adopted the reporting of all-in sustaining costs per silver ounce as a non-GAAP measure of a silver mining company's operating performance and the ability to generate cash flow from operations. This measure has no standardized meaning, and the Company has utilized an adapted version of the guidance released by the
All-in sustaining costs include total production cash costs incurred at the Company's mining operation, sustaining capital expenditures, corporate administrative expense, exploration and evaluation costs, and reclamation and closure accretion. The Company believes that this non-GAAP measure represents the total costs of producing silver from its operation and provides additional information of the Company's operational performance and ability to generate cash flows to support future capital investments and sustain future production.
These non-GAAP financial measures may be calculated differently by other companies as a result of the underlying accounting principles and policies applied. Operating cash flow is an additional GAAP measure.
This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively referred to as "forward-looking information"). In particular, this news release describes potential future events related to (i) estimated production during 2014 of between 18 to 21 million ounces of silver contained in metals concentrates; (ii) the scope and timing of the proposed feasibility study; (iii) the expected timing for completion of the paste plant modifications; (iv) expected total cash cost, total production costs and all-in sustaining cost figures for 2014; and (v) Tahoe's strategy to operate the Escobal mine to world standards, pay dividends and develop precious metals assets in the
FOR FURTHER INFORMATION PLEASE CONTACT:
Tahoe Resources Inc. Ira M. GostinVice President Investor Relations Tel: 775-448-5807 email@example.com Source: Tahoe Resources Inc.