TORONTO, May 9, 2019
/CNW/ - Excellon Resources Inc. (TSX:EXN;
OTC:EXLLF) ("Excellon" or the "Company") is pleased to report
financial results for the three-month period ended March 31, 2019.
Q1 2019 Financial and Operational Highlights (compared to Q1
2018)
- Revenue of $5.2 million in Q1
2019 (Q1 2018 – $5.9 million), with
an additional $3.4 million in revenue
realized in early Q2 2019 from Q1 production
- Production of 522,261 silver equivalent ("AgEq") ounces (Q1
2018 – 482,079 AgEq ounces)
- AgEq ounces payable of 383,438 (Q1 2018 – 406,995 AgEq ounces
payable)
- Total cash cost net of byproducts per Ag oz payable ("COC") of
$11.71 (Q1 20178 – $3.85)
- All-in sustaining cost net of byproducts per Ag oz payable
("AISC") of $25.35 (Q1 2018 –
$15.89)
- Net loss of $3.8 million or
$0.04/share (Q1 2018 – net loss of
$1.2 million or $0.01/share)
- Net working capital totaled $5.5
million at March 31, 2019
(December 31, 2018 – $7.9 million)
- Initial processing of bulk sample has commenced on ore from
Hecla Mining Company's San Sebastian Mine
"We had a strong start to the year with the mine and mill
performing well, both hitting records in March of 256 tonnes per
day mined and over 10,000 tonnes processed, respectively," stated
Brendan Cahill, President and CEO.
"As noted previously, we ended Q1 with a stockpile of more than
2,800 tonnes of high-grade ore and delivered an additional 1,000
tonnes of concentrate early in Q2, which impacted financial results
as approximately $3.4 million in
revenue was deferred to Q2 that would normally be reflected in Q1.
During the second quarter, we expect daily tonnage to continue at a
steady rate and our cost profile to improve considerably."
Financial Results
Financial results for the three month periods ended March 31, 2019 and 2018 as follows:
('000s of USD, except
amounts per share
and per ounce)
|
Q1 2019
|
Q1 2018
|
Revenues
(1)
|
5,179
|
5,911
|
Production
costs
|
(4,612)
|
(3,959)
|
Depletion and
amortization
|
(1,169)
|
(1,282)
|
Cost of
sales
|
(5,781)
|
(5,241)
|
Gross profit
(loss)
|
(602)
|
670
|
|
|
|
Corporate
administration
|
(1,361)
|
(1,423)
|
Exploration
|
(1,005)
|
(708)
|
Other
|
(274)
|
82
|
Net finance cost
(income)
|
(52)
|
1,024
|
Income tax
recovery
|
(491)
|
(867)
|
Net loss
|
(3,785)
|
(1,222)
|
Income (loss) per
share – basic
|
(0.04)
|
(0.01)
|
|
|
|
Cash flow from (used
in) operations (2)
|
(977)
|
471
|
Cash flow from (used
in) operations per share – basic
|
(0.01)
|
0.01
|
|
|
|
Production cost per
tonne (3)
|
272
|
230
|
COC ($/Ag
oz)
|
11.71
|
3.85
|
AISC ($/Ag
oz)
|
25.35
|
15.89
|
(1)
|
Revenues are net of
treatment and refining charges.
|
(2)
|
Cash flow from
operations before changes in working capital.
|
(3)
|
Production cost per
tonne includes mining and milling costs excluding depletion,
amortization and inventory adjustments.
|
Operations improved over previous quarters as multiple ore faces
were accessed with lower dilution and increased head grades. As a
result, average ore produced increased to 223 tonnes per day
("tpd") in the quarter and 256 tpd in March, with a total of 20,083
tonnes mined in the quarter. Daily tonnage is expected to continue
at a steady rate between 230 and 270 tpd as development continues
towards the next production horizon.
As disclosed previously, milling operations were paused for
upgrades in January and commissioning was completed in late
February with minor adjustments ongoing to prepare for processing
of the San Sebastian bulk sample. The initial mill upgrades
completed by late March showed promising results with record
recoveries at higher processing rates, with lead at 82-85%, zinc at
84-87% and silver at 91-93% at a throughput rate of 400+ tpd.
As milling operations were paused, approximately 2,875 tonnes of
fresh ore remained at the end of the quarter and was processed
during April. Additionally, due to truck scheduling constraints at
quarter-end, 1,000 tonnes of concentrate product was in transit or
stockpile at the end of the quarter.
The two factors above resulted in a 6% reduction in AgEq ounces
payable to 383,438 ounces, a 12% decrease in net revenues relative
to Q1 2018 and the deferral of approximately $3.4 million in revenue at current prices.
Additionally, realized metal prices were significantly lower in Q1
2019 relative to Q1 2018, as referenced in the table below.
Cost of sales, including depletion and amortization increased by
10% primarily due to a $0.5 million
increase in energy cost as electricity unit cost increased from
$0.06/kWh in Q1 2018 to $0.11/kWh in Q1 2019. The Company continues to
advance negotiations to secure lower electricity costs via the
private market.
The Company recorded a net loss of $3.8
million in Q1 2019 (Q1 2018 – net loss of $1.2 million), with the primary contributors
being lower net revenues, increased cost of sales and exploration
expenditures, a non-cash contingent liability provision of
$0.6 million and lower realized metal
prices.
Exploration expenditures increased to $1.0 million in Q1 2019 ($0.7 million in Q1 2018) as drilling continued at
Platosa and Evolución. At Platosa, 2,143 metres were drilled from
surface targeting extensions of the NE1-S Manto and testing new
targets in the Jaboncillo area. At Evolución, 2,545 metres were
drilled on the Lechuzas structrure which successfully defined a
mineralized envelope of 600 metres along strike and 500 metres down
dip.
COC was higher in Q1 2019 at $11.71 compared to $3.85 in Q1 2018, primarily due to the revenues
deferred into Q2 2019. Similarly, the Company's AISC for Q1 2019 of
$25.35 increased due to higher COC
(Q1 2018 – $15.89). During Q1 2019,
the Company incurred $0.8 million in
capital expenditures related to the Optimization Plan Phase 2, mine
development and mining equipment. AISC in Q1 2019, excluding
non-cash items was $21.97 and is
expected to improve as production continues at a steady
rate.
Excellon defines AISC per silver ounce payable as the sum of
total cash costs (including treatment charges and net of lead and
zinc by-product credits), capital expenditures that are sustaining
in nature, corporate general and administrative costs (including
non-cash share-based compensation), capitalized and expensed
exploration that is sustaining in nature, and (non-cash)
environmental reclamation costs, all divided by the total payable
silver ounces sold during the period to arrive at a per ounce
figure.
All financial information is prepared in accordance with IFRS,
and all dollar amounts are expressed in U.S. dollars unless
otherwise specified. The information in this press release should
be read in conjunction with the Company's unaudited condensed
interim consolidated financial statements for the three months
ended March 31, 2019 and associated
management discussion and analysis ("MD&A") which are available
from the Company's website at www.excellonresources.com and under
the Company's profile on SEDAR at www.sedar.com.
The discussion of financial results in this press release
includes references to "cash flow from operations before changes in
working capital items", "production cost per tonne", "cash cost per
silver ounce payable", and "AISC per silver ounce payable", which
are non-IFRS performance measures. The Company presents these
measures to provide additional information regarding the Company's
financial results and performance. Please refer to the Company's
MD&A for the three month period ended March 31, 2019, for a reconciliation of these
measures to reported IFRS results.
Operational Results
Operational results for the periods indicated below were as
follows:
|
Q1
|
Q1
|
|
2019
|
2018
|
Tonnes of ore
produced:
|
20,083
|
13,784
|
Tonnes of ore
processed:
|
16,769
|
13,021
|
Tonnes of historical
stockpile processed:
|
1,450
|
5,864
|
Total tonnes
processed:
|
18,219
|
18,885
|
Ore
grades:
|
|
|
|
|
Silver
(g/t)
|
534
|
441
|
|
Lead (%)
|
5.01
|
4.78
|
|
Zinc (%)
|
8.00
|
8.24
|
Historical stockpile
grades:
|
|
|
|
Silver
(g/t)
|
123
|
176
|
|
Lead (%)
|
1.22
|
1.60
|
|
Zinc (%)
|
1.44
|
2.40
|
Blended head grade
(ore and historical stockpiles):
|
|
|
|
Silver
(g/t)
|
502
|
359
|
|
Lead (%)
|
4.71
|
3.79
|
|
Zinc (%)
|
7.48
|
6.43
|
Recoveries:
|
|
|
|
|
Silver (%)
|
89.7
|
87.3
|
|
Lead (%)
|
74.6
|
81.2
|
|
Zinc (%)
|
78.1
|
83.8
|
Production:(1)
|
|
|
|
|
Silver –
(oz)
|
260,445
|
194,462
|
|
AgEq ounces
(oz)(2)
|
522,261
|
482,079
|
|
Lead –
(lb)
|
1,376,423
|
1,275,418
|
|
Zinc –
(lb)
|
2,209,624
|
2,253,449
|
Payable:(3)
|
|
|
|
|
Silver ounces –
(oz)
|
174,194
|
166,076
|
|
AgEq ounces (oz)
(2)
|
383,438
|
406,995
|
|
Lead –
(lb)
|
890,712
|
1,139,665
|
|
Zinc –
(lb)
|
1,919,733
|
1,834,743
|
Realized
prices:(4)
|
|
|
|
Silver –
($US/oz)
|
15.45
|
16.49
|
|
Lead –
($US/lb)
|
0.92
|
1.10
|
|
Zinc –
($US/lb)
|
1.26
|
1.48
|
|
|
|
|
|
(1)
|
Period deliveries
remain subject to assay and price adjustments on final settlement
with concentrate purchaser(s). Data has been adjusted to reflect
final assay and price adjustments for prior period deliveries
settled during the period.
|
(2)
|
AgEq ounces
established using average realized metal prices during the period
indicated applied to the recovered metal content of the
concentrates to reflect the revenue contribution of base metal
sales during the period.
|
(3)
|
Payable metal is
based on the metals delivered and sold during the period, net of
payable deductions under the Company's offtake arrangements and
will differ from production due to these reasons.
|
(4)
|
Average realized
price is calculated on current period sale deliveries and does not
include the impact of prior period provisional adjustments in the
period.
|
About Excellon
Excellon's 100%-owned Platosa Mine has been Mexico's highest-grade silver mine since
production commenced in 2005. The Company is focused on optimizing
Platosa's cost and production profile, discovering further
high-grade silver and carbonate replacement deposit (CRD)
mineralization on the 21,000 hectare Platosa Project and epithermal
silver mineralization on the 100%-owned 45,000 hectare Evolución
Property, and capitalizing on current market conditions by
acquiring undervalued projects in the Americas.
Additional details on the La Platosa Mine and the rest of
Excellon's exploration properties are available at
www.excellonresources.com.
Forward-Looking Statements
The Toronto Stock Exchange has not reviewed and does not
accept responsibility for the adequacy or accuracy of the content
of this Press Release, which has been prepared by management. This
press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 27E of the
Exchange Act. Such statements include, without limitation,
statements regarding the future results of operations, performance
and achievements of the Company, including potential property
acquisitions, the timing, content, cost and results of proposed
work programs, the discovery and delineation of mineral
deposits/resources/reserves, geological interpretations, proposed
production rates, potential mineral recovery processes and rates,
business and financing plans, business trends and future operating
revenues. Although the Company believes that such statements are
reasonable, it can give no assurance that such expectations will
prove to be correct. Forward-looking statements are typically
identified by words such as: believe, expect, anticipate, intend,
estimate, postulate and similar expressions, or are those, which,
by their nature, refer to future events. The Company cautions
investors that any forward-looking statements by the Company are
not guarantees of future results or performance, and that actual
results may differ materially from those in forward looking
statements as a result of various factors, including, but not
limited to, variations in the nature, quality and quantity of any
mineral deposits that may be located, significant downward
variations in the market price of any minerals produced, the
Company's inability to obtain any necessary permits, consents or
authorizations required for its activities, to produce minerals
from its properties successfully or profitably, to continue its
projected growth, to raise the necessary capital or to be fully
able to implement its business strategies. All of the Company's
public disclosure filings may be accessed via www.sedar.com and
readers are urged to review these materials, including the
technical reports filed with respect to the Company's mineral
properties, and particularly the September
7, 2018 NI 43-101 technical report prepared by SRK
Consulting (Canada) Inc. with
respect to the Platosa Property. This press release is not, and is
not to be construed in any way as, an offer to buy or sell
securities in the United States.
SOURCE Excellon Resources Inc.