October 23, 2014

Santacruz Silver Announces Third Quarter 2014 Production Results

Vancouver, B.C. -- Santacruz Silver Mining Ltd. (TSX.V:SCZ) (the "Company" or "Santacruz") is pleased to announce third quarter 2014 production of 184,900 silver equivalent ounces from the Company's Rosario Mine in San Luis Potosi, Mexico. This production represents a 9.9% quarter over quarter increase as compared with Q2 2014 silver equivalent ounces.

During the second quarter, the Rosario Mine produced at an average rate of approximately 325 tonnes per day ("tpd"). By the end of the third quarter, the mine was producing at approximately 380 tpd. With current milling capacity of 300 tpd, the higher mining rate has resulted in a surface stockpile inventory of +8,500 tonnes of ore. Santacruz is finalizing the installation of a third ball mill, which when operational later in the fourth quarter, will increase the milling capacity from 300 tpd to 450 tpd, with a further increase to 700 tpd as additional flotation cells are integrated.

"The Rosario Mine is now in position from a development perspective to provide the full mine capacity of between 450 tpd to 500 tpd in the very near term," stated Arturo Préstamo, CEO of Santacruz. "Our main focus is to generate free cash flow at the Rosario Mine".

Third Quarter 2014 Operations Highlights (Compared to 2nd Quarter 2014)
  • Ore processed grew 4.7% to 23,677 tonnes;
  • Metal production increased 9.9% to 184,900 silver equivalent ounces ("Ag eq oz");
  • Ore milled blend has come 60% from development and 40% from producing stopes;
2014 Third Quarter Operational Highlights

Operations Summary

Q3 2014

Q2 2014

Change

 

 

 

 

Ore processed (tonnes milled)

23,677

22,612

4.7%

Metal Recovered to Concentrate:

 

 

 

  Silver equivalent (ounces)1

184,900

168,300

9.9%

  Silver (ounces)

115,455

100,227

15.2%

  Gold (ounces)

94.0

106.8

(12.0%)

  Lead (tonnes)

184.9

165.5

11.7%

  Zinc (tonnes)

462.2

393.6

17.4%

Additional Third Party Precipitate Processed2:

 

 

 

  Silver equivalent (ounces)1

21,600

-

n/a

  Silver (ounces)

1,146

-

n/a

  Gold (ounces)

327.0

-

n/a

Silver Equivalent Payable Ounces

186,780

148,800

25.5%

Note 1 EqAgOz=(Au*Pau/31.1035)+(Ag*Pag/31.1035)(+(Cu*Pcu*22.05)+(Pb*Ppb*22.05)+(Zn*Pzn*22.05)
(Pag)

Metal Prices: Ag $20, Au $1,250 Pb $0.96, Zn $0.92

Note 2 During the third quarter the Company purchased and processed at the Rosario milling facility certain third party precious metal precipitates containing gold and silver.

Third Quarter 2014 Grade & Recovery Table

  Au

   Ag

   Pb

   Zn

g/t

%

0.16

161

0.91

2.39

Total Recoveries

79.0%

90.0%

86.1%

81.7%


Development Plan for 2014

Underground mine development at the Rosario Mine is now reaching a steady state of delivering between 450 tpd to 500 tpd per day and is expected to average those levels during Q4 2014 resulting in a further buildup of stockpiled ore. The Company plans to have a constant stockpile available at surface of approximately 7,000 tonnes. For the balance of 2014, the Company will focus on the mill becoming fully operational and maintaining the steady ramp-up of mine development as we enter into 2015.

Qualified Person

All technical information included in this statement has been reviewed and approved by Donald E. Hulse P.E. of Gustavson Associates LLC. Mr. Hulse is independent of the Company and a qualified person, pursuant to the meaning of such terms in National Instrument 43-101 Standards of Disclosure for Mineral Projects.

About Santacruz Silver Mining Ltd.

Santacruz is a Mexican focused silver company with a producing mine (Rosario); two advanced-stage projects (San Felipe and Gavilanes) and an early-stage exploration project (El Gachi). The Company is managed by a technical team of professionals with proven track records in developing, operating and discovering silver mines in Mexico. Our corporate objective is to become a mid-tier silver producer.

'signed'

Arturo Préstamo Elizondo,
President, Chief Executive Officer and Director

For further information please contact:

Neil MacRae
Santacruz Silver Mining Ltd.
Email: info@santacruzsilver.com
Telephone: (604) 569-1609

Neither the 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.

Forward looking information

Certain statements contained in this news release, such as planned production levels, grades, mine and mill development, mill recovery rates and the acquisition of mineralized material from third parties, constitute "forward-looking information" as such term is used in applicable Canadian securities laws. Forward-looking information is based on plans, expectations and estimates of management at the date the information is provided and is subject to certain factors and assumptions, including, that the Company's financial condition and development plans do not change as a result of unforeseen events, that the Company obtains regulatory approval, that the Company is able to obtain material from third parties on reasonable terms, future metal prices and the demand and market outlook for metals. Based on the Company's geological model and currently known mining blocks, the Company anticipates improved silver head grades and silver recoveries. Forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual results to vary materially from those projected in such forward-looking information. Factors that could cause the forward-looking information in this news release to change or to be inaccurate include, but are not limited to, the risk that any of the assumptions referred to prove not to be valid or reliable, that occurrences such as those referred to above are realized and result in delays, or cessation in planned work, that the Company's financial condition and development plans change, delays in regulatory approval, risks associated with the interpretation of data, the geology, grade and continuity of mineral deposits, the possibility that results will not be consistent with the Company's expectations, as well as the other risks and uncertainties applicable to mineral exploration and development activities and to the Company as set forth in the Company's Annual Information Form filed under the Company's profile at www.sedar.com. There can be no assurance that any forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader should not place any undue reliance on forward-looking information or statements. The Company undertakes no obligation to update forward-looking information or statements, other than as required by applicable law.

Rosario Mine

The decision to commence production at the Rosario Mine was not based on a feasibility study of mineral reserves demonstrating economic and technical viability, but rather on a more preliminary estimate of inferred mineral resources. Accordingly, there is increased uncertainty and economic and technical risks of failure associated with this production decision. Production and economic variables may vary considerably, due to the absence of a complete and detailed site analysis according to and in accordance with NI 43-101.