Silvermet Inc.
TSX VENTURE : SYI

Silvermet Inc.

May 17, 2012 17:23 ET

Silvermet Reports Continuing Profits in Q1 2012

TORONTO, ONTARIO--(Marketwire - May 17, 2012) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Silvermet Inc. ("Silvermet" or the "Company") (TSX VENTURE:SYI) is pleased to announce continuing profits in Q1, 2012.

Highlights (in US$)

The highlights of the Company's Q1, 2012 results include the following (operational figures expressed at 100%):

  • Silvermet is debt free. At March 31, 2012, it has cash and credit facility receivable of $4.0 million, or $0.025 per common share.
  • EAFD throughput in Q1, 2012 increased by 15% to approximately 15,000 Dry Metric Tonnes ("DMT") from approximately 13,000 DMT in Q1, 2011.
  • Production in Q1, 2012 increased by 15% to 3,634 DMT zinc concentrate (containing 67% zinc) compared to Q1, 2011 production of 3,154 DMT.
  • Sales volume in Q1, 2012 increased by 18% to 4,270 DMT compared to 3,623 DMT in Q1 2011, 3% higher than production increases, due to the timing of individual shipments.
  • Revenues in Q1 2012 increased by 5% to $5.2 million (at 100%) compared to $5.0 million in Q1 2011, as a result of higher sales volume offset by lower zinc prices.
  • EBITDA for both Q1, 2012 and Q1, 2011 were approximately $1.1 million, reflecting offsetting effect of increased revenues and increased direct operating costs.

The following table summarizes comparative quarterly results and reconciles net income, an IFRS measure, to EBITDA. Both 2012 and 2011 figures reflect operational results at a proportionally consolidated level of 49%.

Three months ended March 31,
2012 2012 2011 2011
100% 49% 100% 49%
Revenue $ 5,226,028 $ 2,560,754 $ 4,963,404 $ 2,432,068
EBITDA(1) $ 1,109,561 $ 484,045 $ 1,147,508 $ 540,440
Net income $ 285,716 $ 243,701
(1) EBITDA is a non-IFRS measure, does not have a standardized meaning prescribed by IFRS and may not be comparable to similar terms and measures presented by other issuers. EBITDA comprises net income (loss) before income taxes, interest and financing expense (including accretion of liabilities), amortization expense and stock option expense. The Company believes it is appropriate to exclude stock option expense from EBITDA as a measure of operating performance that excludes non-recurring items.

Silvermet has been generating positive cash flows since Q3, 2010. The working capital position of the Company continues to strengthen with no debt, established operations, relatively stable zinc prices and lower treatment charges.

Silvermet's Turkish joint venture BST has recently signed two purchase agreements for plant sites in Adana and Izmir as part of its aggressive expansion plans. After the planned addition of the two new plants in Turkey, annual EAFD processing capacity will increase from 60,000 to 280,000 tonnes.

Some recent developments:

  • Detailed engineering is presently underway.
  • Environmental impact assessments and other related studies are underway to support the permit applications.
  • Discussions are presently underway with financial institutions to secure project financing for the plants.

About Silvermet:

Silvermet's principal business activity is the recycling of electric arc furnace dust ("EAFD") obtained from steel companies through a Waelz kiln to recover zinc concentrates that are then sold to zinc smelters throughout the world. The Company owns 49% of BST, which operates a Waelz kiln facility located in Iskenderun, Turkey.

Additional Information:

Additional information can be accessed at the Company's website www.silvermet.ca or through the Company's public filings at www.sedar.com.

Caution concerning forward-looking statements: The information in this release may contain forward-looking information under applicable securities laws. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied by the forward-looking information. Factors that may cause actual results to vary include, but are not limited to, inaccurate assumptions concerning the exploration for and development of mineral deposits, political instability, currency fluctuations, unanticipated operational or technical difficulties, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions or conditions in the financial markets and the inability to raised additional financing. Readers are cautioned not to place undue reliance on this forward-looking information. The Company does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events except as may be required under applicable securities laws. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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