Santacruz Silver Mining Ltd (TSX-V:SCZ, OTC:SZSMF) delivered fourth quarter and full year production results that beat estimates from Atrium Research analysts, prompting the firm to repeat its ‘Buy’ rating on the silver miner.
Analysts wrote that production of 4.71 million ounces of silver equivalent topped their estimate of 4.5 million ounces and marked an improvement from 4.64 million ounces in the third quarter.
“[The] results impress us as the company continues to optimize its four mines and take advantage of the elevated silver and zinc prices,” they wrote in a note to clients.
Analysts added that the results highlighted the importance of being a multi-asset producer, with some assets missing expectations while others outperformed.
“We are particularly impressed with Santacruz’s Zimápan Mine, which beat our estimates of silver equivalent produced by approximately 10% (producing 1.1 million ounces of silver equivalent) and continues its stellar track record of consistent production,” they wrote.
“Additionally, the three Bolivian operations ramped processed tonnes which offset a slight drop in silver head grades. The San Lucas ore sourcing business continues to prove its value in utilizing extra capacity at the processing plants from the three operating mines.”
Analysts expect strong Q4 financial results to be reported by Santacruz in the coming months.
“Santacruz’s operation of four, multi-metal assets, offers a more diversified and lower-risk investment opportunity compared to single-asset/single-metal peers,” they wrote.
They awarded the company a C$0.90 price target, implying a return of 157% from Santacruz’s share price at the time of writing.