SILVERCREST MINES INC

The Supreme Court of British Columbia granted the final order approving the arrangement among SilverCrest, SilverCrest Metals and First Majestic, with the effective date expected to be 1 October 2015. This is the last substantive filing in the record held here; no closing confirmation is cached.

business combination

Both shareholder bases approved: about 93.2% of SilverCrest votes cast (92.4% of disinterested votes) and 98.6% of First Majestic votes on the share issuance, with 88.3% of SilverCrest votes approving the new SilverCrest Metals option plan. Closing was set for 1 October 2015.

business combination

SilverCrest sent shareholders the notice and joint circular for a special meeting on 25 September 2015 to vote on the First Majestic Silver takeover agreed on 26 July 2015. Each SilverCrest share would be exchanged for 0.2769 of a First Majestic share plus C$0.0001 in cash, plus 0.1667 of a share in the new exploration company SilverCrest Metals. The circular states a value of C$1.30 per share based on First Majestic's 24 July 2015 TSX close, a premium of about 35% to SilverCrest's close that day and about 37% to its 30-day average. Approval needs two-thirds of votes cast, plus a simple majority excluding shares held by J. Scott Drever, N. Eric Fier and Barney Magnusson. Shareholders can dissent by written objection by 23 September 2015. The board unanimously recommends voting for. SilverCrest Metals would receive the Cruz de Mayo, Las Chispas, Angel de Plata, Huasabas and Estacion Llano exploration properties plus C$5,250,000 in cash, and N. Eric Fier would lead it. Former SilverCrest holders are expected to own about 21.2% of First Majestic and about 90.1% of SilverCrest Metals. This continues the takeover thread; the vote and closing are still ahead.

regulatory community update

A resource estimate for the Cruz de Mayo silver project - two concessions totalling 452 hectares in Sonora, 35 km from Santa Elena - prepared jointly for SilverCrest Mines and SilverCrest Metals. The report states plainly that the property is being transferred to SilverCrest Metals as part of the First Majestic transaction, and that SilverCrest Metals shares will be distributed to SilverCrest shareholders as a standalone company. One concession carries a 2.5% net smelter royalty capped at $1 million.

resource reserve update

Filed the executed arrangement agreement dated 26 July 2015 among First Majestic, SilverCrest and 1040669 B.C. Ltd. - the numbered company that became SilverCrest Metals Inc., the spin-out vehicle carrying the exploration assets to shareholders.

business combination

First Majestic Silver agreed to acquire SilverCrest: 0.2769 of a First Majestic share plus C$0.0001 in cash per SilverCrest share, worth C$1.30 on First Majestic's 24 July close - a 35% premium to the previous close and about 37% to the 30-day volume-weighted average. Shareholders would also receive shares in a new company holding certain exploration assets, so the deal splits the producing mine from the exploration ground rather than selling both.

business combination

Second-quarter production set records at 681,302 ounces of silver (up 294%) and 14,137 ounces of gold (up 254%), or 1,624,211 silver-equivalent ounces. First-half output reached 2,973,738 silver-equivalent ounces, and 2015 guidance was raised from 4.0-4.4 million to 4.7-5.1 million.

production update

SilverCrest accelerated underground exploration of El Cholugo, previously planned for 2016, aiming to include it in the 2015 mine plan. 132 channel samples from drifting on the Alejandra vein averaged 3.3 m at 8.80 g/t gold and 419.4 g/t silver.

drilling result

Record first quarter: 465,391 ounces of silver (up 131%), 13,255 ounces of gold (up 76%) and 1,349,527 silver-equivalent ounces (up 92%), with the mill at 3,015 tonnes a day against 3,000 nominal. Recoveries were 60% for silver and 91% for gold. The expansion is now visibly paying.

production update

The updated pre-feasibility study replaced the reserves mined and renewed an eight-year life from January 2015 on lower metal prices. Probable reserves of 7.45 million tonnes at 1.23 g/t gold and 78.4 g/t silver hold 295,000 ounces of gold and 18.76 million ounces of silver - down only 10% and 5% after nearly two years of mining and a cut in the gold price assumption from US$1,450 to US$1,300. Base-case pre-tax net present value US$144 million at a 5% discount, US$119 million after tax, on US$555 million of revenue and cash costs of US$11.59 per silver-equivalent ounce. A newly defined El Cholugo reserve of 252,000 tonnes at 2.58 g/t gold and 147.0 g/t silver was added; indicated and inferred resources fell sharply as material converted to reserve.

resource reserve update

Record 2014 production of 2.81 million silver-equivalent ounces, up 6%, with silver at a record 1.16 million ounces (up 49%) and gold at 27,609 ounces (down 11%); the fourth quarter alone set a record at 936,472 silver-equivalent ounces. The year in which the mine changed from open-pit heap leach to underground mining and milling and still grew.

production update

The new plant delivered: record third-quarter silver production of 385,251 ounces, up 90%, and 810,334 silver-equivalent ounces, up 26%, with gold at 7,085 ounces. Mill throughput averaged 2,371 tonnes a day in the quarter and was running at about 2,500 t/d by mid-October.

production update

Spending shifted from expansion capital to sustaining capital and operating cost, with free cash flow the stated priority. The ramp-up of underground stoping to 1,500 tonnes a day was running late, on stope design and geotechnical work following the infill drilling and on delays starting long-hole drilling.

production update

Commissioning of the 3,000 tonne-a-day mill completed on 1 August, on budget, after a three-month ramp-up - the central milestone of the transition from open-pit heap leach to underground mining and conventional milling.

production update

Second-quarter production fell as expected during the changeover: 173,000 ounces of silver (down 11%) and 3,995 ounces of gold (down 46%), 412,700 silver-equivalent ounces in all, down 38%. The open pit had been stopped in April and the new mill only started in May.

production update

Started commissioning the new 3,000 tonne-a-day counter-current decantation and Merrill-Crowe plant at Santa Elena. The three-year, US$99 million expansion programme - drilling, study, engineering, plant and underground development - was on budget within 5% with only modest delays, and peaked at about 450 workers.

production update

The expansion stayed on budget within 5% but a late ball mill pushed start-up of the 3,000 tonne-a-day plant from the first quarter into April. The company also chose to stop open-pit mining and accelerate underground work instead - a decision it flagged would hit second-quarter production.

production update

A contractor operating a haul truck died on 21 March when his vehicle breached a safety berm and rolled into the lower pit, apparently after a medical episode. The open pit was shut immediately and reopened once Mexican authorities completed their investigation; crushing, leaching, underground work and mill start-up continued.

other

Closed a $23.0 million prospectus offering - 8,855,000 shares at $2.60 including the over-allotment in full, led by Dundee - for working capital and general purposes, as the mill expansion neared start-up.

capital raising announcement

Sandstorm Gold exercised its underground mine option at Santa Elena, buying 20% of gold produced underground for a US$10 million upfront deposit plus ongoing payments of US$350 an ounce until 50,000 ounces have been delivered - counting the 18,593 ounces already taken from open-pit production - and US$450 an ounce thereafter. Money for the expansion, at the price of a fifth of the underground gold.

material agreement

Graduated from the TSX Venture Exchange to the main Toronto Stock Exchange, trading from 24 February 2014 under the same SVL symbol, with the NYSE MKT listing unchanged. A step up in market standing eighteen months after the US listing.

listing compliance notice

Record 2013 production of 2.66 million silver-equivalent ounces, up 12%, comprising 779,026 ounces of silver (up 34%) and 31,099 ounces of gold (down 6%), with the strip ratio cut from 4.25 to 2.56. The second full year of commercial production, and the last before the mine was rebuilt as an underground operation.

production update

A preliminary economic assessment for a La Joya starter pit - a low-strip open pit with a nine-year life feeding a 5,000 tonne-a-day plant - showing a base-case pre-tax net present value of US$133 million at a 5% discount and a 30% internal rate of return. Deliberately scoped small and cheap for the market conditions, with expansion left as an option.

resource reserve update

Results for the 47 holes that missed the cut-off for the pre-feasibility study - 15 m at 4 g/t gold and 243 g/t silver including 2 m at 17.5 g/t gold and 664 g/t silver - expanding El Cholugo and El Cholugo Dos and finding a third new zone, Tortuga. Of the 181-hole programme, 134 holes went into the reserve; the deposit was still open laterally and at depth.

drilling result

The Santa Elena expansion pre-feasibility study added eight years of mine life from January 2014: US$684.9 million of revenue from 12.11 million ounces of silver and 262,739 ounces of gold, US$282.2 million of operating costs at an average cash cost near US$11 per silver-equivalent ounce, US$87.8 million of capital, and a base-case pre-tax net present value of US$243.7 million at a 5% discount with an 88% internal rate of return, on US$1,450 gold and US$28 silver.

resource reserve update

A three-year US$40 million secured corporate facility from Scotiabank to fund the Santa Elena expansion, secured on the equity of the Mexican subsidiaries. The headline size overstates what was available: the limit steps down US$10 million in July 2014 and again in July 2015, and until Mexican security registration was complete only US$15 million could be drawn. Pricing runs 3.00-4.25% over LIBOR depending on leverage, and drawing it required releasing Macquarie's existing security.

debt financing

The payoff from eighteen months of delineation drilling: Santa Elena probable reserves - underground, open pit and leach pad - restated at 8.2 million tonnes grading 74.9 g/t silver and 1.24 g/t gold for 19.7 million ounces of silver and 327,430 ounces of gold, up 103% in silver and 50% in gold. Indicated resources outside reserves rose 127% in silver and 99% in gold to 7.9 million ounces and 116,000 ounces.

resource reserve update

Exercised the option over the nine La Joya West concessions (about 529 hectares) with a final US$2.5 million payment, half in cash and half in 615,776 shares at C$2.06; the vendors keep a 2% net smelter royalty. With La Joya East still under option and five staked concessions, the project reached about 10,660 hectares.

asset acquisition disposition

Since mid-2012, 132 holes at Santa Elena had delineated the deposit over 1,200 m of strike and to 600 m depth, with 21.6 m at 1.46 g/t gold and 169.1 g/t silver including 0.60 m at 5.2 g/t gold and 1,840 g/t silver in this batch. Management expected the coming reserve estimate to extend mine life well past the 5.5 years originally set for the heap leach.

drilling result

One hundred and eleven of 114 delineation holes done at Santa Elena: 25.8 m at 1.24 g/t gold and 187.6 g/t silver including 1.9 m at 2.34 g/t gold and 1,281.9 g/t silver, a second new zone (El Cholugo Dos) below the Main Mineralized Zone, and that zone extended about 300 m past the resource boundary. The underground decline had passed 1,200 m, against an open-pit heap leach life of only 6.5 years.

drilling result

Updated La Joya inferred resource: 198.6 million ounces silver-equivalent at a 15 g/t cut-off, 159.8 million at the 30 g/t base case, and 100.8 million at 60 g/t, plus 75.1 million pounds of tungsten at a 0.05% cut-off. The 60 g/t portion - 27.9 million tonnes at 112 g/t silver-equivalent - was flagged as a potential starter pit for a preliminary economic assessment. Up from the 101.9 million ounce resource the 2012 drilling started from.

resource reserve update

Beat 2012 guidance with 579,609 ounces of silver, 33% above the original 435,000-ounce target, and 33,004 ounces of gold just short of its 33,500-ounce target - 2.37 million silver-equivalent ounces in all. The crusher averaged 3,162 tonnes a day against a 2,500 t/d design, the Phase II leach pad was finished on time and on budget, and the mine passed one million ounces of silver produced since it started.

production update

More Santa Elena bonanza intercepts - 13 m at 1.6 g/t gold and 324.8 g/t silver including 1 m at 5.07 g/t gold and 2,840 g/t silver, plus a 1.7 m intercept at 42.59 g/t gold and 1,460 g/t silver - and the naming of the new El Cholugo zone. Four of the high-grade hits sit on or beyond the existing resource boundary.

drilling result

Bonanza grades below the pit at Santa Elena: 15.6 m at 23.9 g/t gold and 307.9 g/t silver, including 2.3 m at 157.3 g/t gold and 1,610.5 g/t silver, and a new high-grade zone sub-parallel to and below the Main Mineralized Zone being mined. Eighty-seven of a planned 100 holes complete. This is the result that turns the underground expansion from an idea into a plan.

drilling result

The final 15 holes of La Joya Phase II returned 80 m at 78.8 g/t silver, 0.31 g/t gold and 0.5% copper - 137 g/t silver-equivalent - with intervals up to 251 m and silver-equivalent values reaching 411.5 g/t. Phase II closed with the trend at about 2.5 km by 700 m and the Coloradito and Santo Nino targets outlined.

drilling result

Twenty-one holes of a planned 110-hole programme at Santa Elena, aimed at confirming remaining open-pit reserves, testing below the pit and re-categorising underground resources for the coming pre-feasibility study. Best results were 52 m at 2.19 g/t gold and 95.5 g/t silver (SERCP-9V, apparent width) and 16 m at 6.18 g/t gold and 103.4 g/t silver (SERCP-11A, true width).

drilling progress report

Paid out the last of the gold hedge that Macquarie Bank had required in June 2009 as a condition of the Santa Elena construction loan. The original hedge sold 55,000 ounces forward at US$926.50; 26,000 ounces had been delivered in 2010-11, and the remaining 29,000 were cash-settled for US$23.25 million, an effective US$1,728 an ounce against the US$926.50 the hedge would have paid. Funded from the $34.5 million raised the week before, it left the company entirely unhedged.

debt financing

Closed the offering at $34.5 million gross after the over-allotment was taken in full: 13,529,750 shares at $2.55, with a 5.5% underwriting commission. Proceeds were to pay out the remaining gold hedge and for general purposes.

capital raising announcement

Record quarterly silver production of 151,368 ounces, up 42%, with gold at 7,184 ounces, down 18%, from 265,598 tonnes crushed. Annual silver guidance was lifted from 435,000 to 535,000 ounces with gold guidance held at 33,500 - the silver-heavy mix that would define the mine.

production update

Upsized the same-day bought deal to $30.0 million - 11,765,000 shares at $2.55 - with the 15% over-allotment option unchanged and the proceeds still earmarked for eliminating the gold hedge. Two versions of this release and the original $26.1 million announcement were all furnished on 5 October 2012, so this company has three separate rows covering what is really one financing.

capital raising announcement

Announced a $26.1 million bought-deal financing - 10,235,000 shares at $2.55 through underwriters led by Dundee Securities, with a 15% over-allotment option and a 5.5% commission. The stated purpose was to clear the remaining gold hedge commitments.

capital raising announcement

Common shares approved for the NYSE MKT, trading from 27 August 2012 under SVLC, with the TSX Venture listing under SVL continuing. This is where the SEC filing record held here begins - Santa Elena was already producing and the company had been listed in Canada for years.

listing compliance notice