TORONTO (miningweekly.com) – Canadian precious metals producer SilverCrest Mines this week reported a higher headline loss for the three months ended December 31, as costs rose mainly as a result of added direct production costs after the company transitioned the Santa Elena mine from an openpit heap-leach operation to an underground mining and milling operation, compounded by lower metals prices.

The Mexico-focused company on Wednesday reported an adjusted loss for the quarter of 2.04-million, or $0.02 a share, compared with adjusted earnings of $1.62-million, or $0.01 a share, in the corresponding period a year earlier.

The Vancouver-based miner reported a net loss of $5.6-million, or $0.05 a share, for the period, compared with earnings of $4.1-million, or $0.04 a share, in 2013. The net loss was mainly attributed to lower mine operating earnings generated at Santa Elena and noncash impairment charges of $4.96-million. During the quarter, the company recorded a one-time, noncash deferred tax charge of $5.8-million as a result of the enactment of the Mexican Tax Reform.

Nevertheless, SilverCrest lifted its quarterly revenues by 27% to $16.4-million, compared with $12.9-million a year earlier.

Silver sales rose 103% year-on-year to a new record of 422 250 oz, compared with 208 200 oz. However, a 21% lower average realised price of $16/oz offset the gains, resulting in only 61% higher silver revenue.

The total gold revenue for the fourth quarter rose 3% over the same period in 2013, after SilverCrest sold 8 968 oz, up 9% over the 8 220 oz sold in the same period in 2013. The company sold 7 394 oz of gold at an average realised price of $1 185/oz, a 5% decline.

“2014 was another challenging but successful year for SilverCrest, as we transitioned from an openpit heap-leaching operation at Santa Elena to an underground mining and milling operation. By the start of the fourth quarter, we had successfully commissioned both the underground mine and the 3 000 t/d mill and processing facilities.

“SilverCrest achieved 93% of its 2014 metal production guidance, in spite of the early closure of the openpit and short-term delays encountered with underground stope production,” CEO Scott Drever said.

SilverCrest expected to produce between 4-million ounces and 4.4-million ounces of silver equivalent this year, at a silver-to-gold ratio of 66.7:1. This represented a significant increase over 2014 output of 2.81-million silver equivalent ounces.

As at December 31, SilverCrest had $31.3-million cash in the bank and an undrawn $15-million credit facility.