Korelin Economics Report

SilverCrest Announces 2012 Financial Results Cash Flow from Operations of $40.1 million ($0.44 per share) Net Earnings $30.5 million ($0.33 per share)

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SilverCrest Mines Inc. (the “Company”) is pleased to announce its audited consolidated financial results for the year and fourth quarter ended December 31, 2012 (all figures in U.S. dollars unless otherwise specified). The information in this news release should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2012 and associated management discussion and analysis (“MD&A”) which are available from the Company’s website at www.silvercrestmines.com and under the Company’s profile on SEDAR at www.sedar.com.

2012 YEAR END FINANCIAL HIGHLIGHTS:

J. Scott Drever, President stated; “We are extremely pleased with the financial performance achieved in 2012. It is rewarding to deliver strong financial results that mirror Santa Elena’s production performance. Our management group in Vancouver and operating team in Mexico continue to do an excellent job and should be congratulated for achieving cash flow of $0.44 per share and earnings of $0.33 per share. We look forward to another strong financial year in 2013, with an expected increase in silver production to 625,000 ounces, consistent gold production at 33,000 ounces and cash costs remaining steady at or below $8.50 per silver equivalent ounce”.

(1) Cash flow from operations before changes in working capital items.
(2) This is a Non-IFRS performance measure. Silver equivalence is a weighted volume average based on market spot prices per ounce of gold and silver at the quarter end dates. The 2011 number excludes the costs and ounces sold in the first quarter of 2011, as prior to commercial production date of April 1, 2011 operating revenues and expenses were capitalized to the Santa Elena Mine.
(3) IFRS 18 – Revenue should be recorded at its fair value, which for gold and silver is the market spot price on the date revenue is recognized.
(4) With the Hedging Facility fully repaid in November, 2012, this non-cash adjustment will be eliminated in future reporting periods.

Fourth Quarter ended December 31, 2012

Net earnings were $13,616,028 ($0.14 per share basic) for the fourth quarter compared with $9,863,459 ($0.11 per share basic) in 2011. The increase in net earnings was mainly driven by a reduction in annual Mexican income tax estimate. The settlement of the Hedging Facility during the fourth quarter made the Company eligible for current income tax deduction.

Silver and gold revenues totalled $18,243,732 (2011 – $18,258,349) in the fourth quarter. Silver and gold revenues on a cash basis increased by 47% to $17,609,949 (2011 – $12,002,316), from record silver sales and more gold sales realized at market spot prices. Silver sales were a quarterly record of 171,714 ounces (2011 – 120,199), or 43% higher than during the same period in 2011. The average realized price received was consistent at $32 (2011 – $32) per ounce.

Gold sales were 8,444 ounces (2011 – 9,702) or 13% below 2011. The Company sold 6,755 gold ounces (2011 – 400) at market spot realized prices of $1,706 (2011 – $1,744) per ounce. There were no gold ounces (2011 – 7,362) delivered into the Hedging Facility at $926.50 per ounce as the Facility was settled in cash from a portion of the proceeds of the $34.5 million prospectus offering. The Company delivered 1,689 gold ounces (2011 – 1,940) to Sandstorm at $350 per ounce. Non-cash gold revenues attributed to deferred revenue totaled $633,783 (2011 – $728,209). The non-cash amount attributed to the Hedging Facility deliveries in the fourth quarter was $nil (2011 – $5,527,824). The non-cash amounts with respect to the Hedging Facility represented the difference between the market spot price at the date of delivery of gold (2011- average realized price of $1,676 per ounce) and the hedge price of $926.50 per ounce settled.

Cost of sales amounted to $5,156,489 (2011 – $3,764,200). Cash cost per silver equivalent ounce sold amounted to $8.05, Au:Ag 55.6:1 (2011 – $5.65, (Au:Ag 56.3:1), Corporate market guidance for 2012 was $8.20 per silver equivalent ounce, (Au:Ag 55:1)) (This is a NON-IFRS Performance Measure). The main drivers in the increase of cash cost per silver equivalent ounce sold from previous 2012 quarters were higher overall operating costs based on lower grade ore mined using a lower cutoff grade (0.2 gpt Au equivalent versus 0.38 used in 2011), and salary and other benefit increases, which corresponded to an increase in the average silver equivalent ounce value loaded on the leach pad and recorded in cost of sales. General and administrative expenses increased to $2,106,039 (2011 – $1,705,554) primarily due to an increase in remuneration, bonus payments and regulatory expenses for now being dual listed on the TSX-V and NYSE MKT.

In the fourth quarter, current income tax recovery (expense) amounted to $3,494,000 (2011 – ($985,000)), mainly from the eligible deduction for income tax purposes of the Hedging Facility cash settlement. Deferred tax expense amounted to $781,000 (2011 – $364,000), primarily from recognizing an income tax deduction on exploration drilling and related costs incurred during the quarter at Santa Elena and the Cruz de Mayo.

Year ended December 31, 2012

Net earnings were $30,475,744 ($0.33 per share basic) for 2012, compared with $9,456,419 ($0.12 per share basic) in 2011. The significant increase in net earnings is driven by continued improvements in operating performance since commercial production was declared during the second quarter of 2011.

Revenues from silver and gold sales totalled $70,520,085 (2011 – $41,870,124) for 2012, which includes $63,456,934 (2011 – $31,839,825) received on a cash basis, $4,448,553 (2011 – $13,081,984) of non-cash revenues due to adjustments to gold spot market prices related to Hedging Facility deliveries and $2,614,598 (2011 – $1,804,352) related to amortization of deferred revenues associated with the Sandstorm Agreement.

SilverCrest sold 588,312 ounces of silver (2011 – 344,724), 71% higher than 2011 at average realized prices of $32 (2011 – $35) per ounce. SilverCrest sold 34,834 ounces of gold (2011 – 23,962), 45% higher than 2011. The Company sold 21,383 ounces of gold (2011 – 400) at market spot realized price of $1,703 (2011 – $1,744) per ounce. The Company delivered 6,484 ounces of gold (2011 – 18,769) into the Hedging Facility at $926.50 per ounce before it was fully settled in November, and delivered 6,967 ounces of gold (2011 – 4,793) to Sandstorm at $350 per ounce.

Non-cash gold revenues totalled $7,063,151 (2011 – $14,886,336). Gold delivered into the Hedging Facility totalled 6,484 ounces (2011 – 18,769) at an average realized price of $925 (2011 – $926). The non cash amount reported of $4,448,553 (2011 – $13,081,984) represents the difference between the market spot price at the date of delivery for gold (at an average realized price of $1,611 (2011 – $1,588) per ounce) and the hedge price of $926.50 per ounce settled. Amortization of deferred revenue associated with the Sandstorm Agreement was $2,614,598 (2011 – $1,804,352).

Cost of sales amounted to $18,307,681 (2011 – $9,526,888). Cash cost per silver equivalent ounce sold amounted to $7.39, Au:Ag 54.3:1 (2011 – $6.07, (Au:Ag 50.4:1), Corporate market guidance for 2012 was $8.20 per silver equivalent ounce, (Au:Ag 55:1)). (This is a NON-IFRS Performance Measure). General and administrative expenses increased to $5,568,582 (2011 – $4,093,438) primarily from increased compensation and bonuses for management and employees, additional fees for listing on NYSE MKT (trading commenced in August, 2012) and the TSX-V as well as greater attendance at tradeshows, conferences and investor presentations in Europe and throughout North America. Cash cost per silver equivalent ounce sold for the year of $7.39 was approximately 10% better than market guidance of $8.20.

Loss on derivative instruments amounted to $3,839,146 (2011 – $11,497,957). With the Hedging Facility now fully repaid, this non-cash adjustment will be eliminated in future reporting periods.

Current income tax expense amounted to $4,156,000 (2011 – $985,000), which relates to the estimate of annual tax payable from Santa Elena operations. SilverCrest has prepaid $1,841,000 in cash, and $2,315,000 by offset of Mexican value added tax receivable. There was no outstanding tax payable at December 31, 2012. Deferred tax expense increased to $1,261,000 (2011 – $364,000) primarily from recognizing an income tax deduction on exploration drilling and related costs incurred in 2012 at Santa Elena and Cruz de Mayo.

Exchange gain (loss) on translation to US Dollars amounted to $561,523 (2011 – ($1,022,390)), due to the strength in 2012, of the Canadian dollar against the US dollar. The value of the Company’s Canadian assets were translated at US$1.00 = CAD$1.0167 at December 31, 2011, and US$1.00 = CAD$0.9949 at December 31, 2012.

NON-IFRS PERFORMANCE MEASURES

The discussion of financial results in this press release includes reference to cash operating cost per silver equivalent ounce sold which is a non-IFRS performance measure. The Company provides this measure to provide additional information regarding the Company’s financial results and performance. Please refer to the Company’s MD&A for the year ended December 31, 2012, for a reconciliation of this measure to reported IFRS results.

OUTLOOK FOR 2013

For 2013, SilverCrest’s immediate focus is to continue to efficiently operate its flagship Santa Elena low cost open pit silver and gold mine, complete the construction of a new 3,000 tonne per day mill facility on schedule and on budget, announce the revised Santa Elena Resources, Reserves and Life of Mine Plan (“LOMP”) and to rapidly advance the delineation of a large polymetallic deposit at the La Joya Property by completing a Preliminary Economic Assessment (“PEA”) and further definition drilling of the 198 million ounce silver equivalent resource. Specific corporate targets are as follows:

Santa Elena Open Pit Production Targets

Santa Elena Expansion Targets

La Joya Project Targets

The Qualified Person under National Instrument (NI 43-101) Standards of Disclosure for Mineral Projects for this News Release is N. Eric Fier, CPG, P.Eng, and Chief Operating Officer for SilverCrest Mines Inc., who has reviewed and approved its contents.

SilverCrest Mines Inc. (TSX-V: SVL; NYSE MKT: SVLC) is a Canadian precious metals producer headquartered in Vancouver, BC. SilverCrest’s flagship property is the 100%-owned Santa Elena Mine, located 150 km northeast of Hermosillo, near Banamichi in the State of Sonora, México. The mine is a high-grade, epithermal gold and silver producer, with an estimated life of mine cash cost of US$8 per ounce of silver equivalent (55:1 Ag: Au). SilverCrest anticipates that the 2,500 tonnes per day facility should recover approximately 4,805,000 ounces of silver and 179,000 ounces of gold over the life of the current open pit at the Santa Elena Mine. A three year Expansion Plan is well underway to double metals production at the Santa Elena Mine (open pit, underground and re-processing leach pad). Exploration programs have rapidly advanced the definition of a large polymetallic deposit at the La Joya property in Durango State where current reported Inferred Resources are 198 million silver equivalent ounces.

FORWARD-LOOKING STATEMENTS

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