TORONTO, March 17, 2021
/CNW/ - Excellon Resources Inc. (TSX: EXN) (TSX: EXN.WT)
(NYSE: EXN) (FRA: E4X2) ("Excellon" or the
"Company") is pleased to report financial results for the
three- and twelve-month periods ended December 31, 2020.
Q4 2020 Financial and Operational Highlights (compared to Q4
2019)
- Revenues increased by 41% to $9.0
million (Q4 2019 – $6.4
million)
- Gross profit improved to $1.6
million (Q4 2019 – loss of $0.6
million)
- Silver production increased by 37% to 355,581 oz (Q4 2019 –
259,282 oz), exceeding Q3 2020 as the strongest quarter of silver
production since Q2 2014
- All-In Sustaining Cost (AISC) per silver ounce payable
decreased 21% to $21.19 (Q4 2019 –
$26.76)
2020 Financial and Operational Highlights (compared to
2019)
- Revenues of $26.2 million (2019 –
$26.5 million) impacted by the
temporary suspension mandated by the Government of Mexico in response to the COVID-19 pandemic in
Q2 2020 (the "Suspension")
- Significant improvements in productivity and cost profile in H2
2020 (compared to H2 2019):
-
- Record 43,332 tonnes mined (H2 2019 – 37,789 tonnes) and 45,237
tonnes milled (H2 2019 – 37,063 tonnes) from Platosa following
restart in late Q2 2020
- Silver equivalent ("AgEq") production increased by 20% to
1,080,644 oz (H2 2019 – 896,838 AgEq oz
- Production cost per tonne decreased by 23% to $239 per tonne (H2 2019 – $311 per tonne)
- Net working capital totaled $9.8
million at December 31, 2020
(December 31, 2019 – $7.6 million), with cash and marketable
securities of $10.7 million as at
December 31, 2020 (December 31, 2019 – $6.7
million)
- Other highlights during 2020 included:
-
- Acquisition of Otis Gold Corp. adding two high-quality gold
growth assets in Idaho, USA and
developing team for the next phases of project advancement
- Listed and commenced trading on the NYSE American, LLC exchange
(the "NYSE American")
- Finalized transition to private electricity supplier at
Platosa, resulting in a 33% unit-cost reduction for
electricity
- Released updated mineral resource estimate on the Evolución
Property delineating a large-tonnage silver, zinc, lead deposit
immediately adjacent to the Miguel Auza Mill
- Restarted underground and surface exploration on multiple
targets at the Platosa Project
- Completed successful drill permitting, land access and ramp-up
of the drilling program at the Silver City Project in Saxony,
Germany with high-grade
discoveries from the first holes drilled on the property for
precious metals in modern times
"Our greatest success in 2020 was ensuring the health of our
people during the COVID-19 pandemic," stated Brendan Cahill, President and Chief Executive
Officer. "Our team in Mexico did
an exceptional job in trying circumstances, while balancing the
continued operation of our business. Coming out of the suspension
in Q2 2020, we turned the operation around, improving productivity
and reducing costs – though concentrate treatment charges remained
high and a strain on cash flow. But 2020 set the stage for
what we believe will be a new year full of resource growth and
discovery, as we advance and commence drilling programs on almost
all of our projects."
Financial Results
Financial results for the three- and twelve-month periods ended
December 31, 2020 and 2019 were as
follows:
('000s of USD, except
amounts per share
and per ounce)
|
Q4
2020
|
Q4
2019
|
2020
|
2019
|
Revenue
(1)
|
9,029
|
6,414
|
26,202
|
26,469
|
Production
costs
|
(5,986)
|
(5,757)
|
(19,981)
|
(23,216)
|
Depletion and
amortization
|
(1,445)
|
(1,250)
|
(4,649)
|
(4,708)
|
Cost of
sales
|
(7,431)
|
(7,007)
|
(24,630)
|
(27,924)
|
Gross profit
(loss)
|
1,598
|
(593)
|
1,572
|
(1,455)
|
|
|
|
|
|
Corporate
administration
|
(1,886)
|
(1,282)
|
(6,896)
|
(4,822)
|
Exploration
|
(1,400)
|
(1,023)
|
(4,032)
|
(3,853)
|
Other expenses,
net
|
1,062
|
1,222
|
(373)
|
782
|
Finance income
(expenses), net
|
(679)
|
753
|
(2,508)
|
295
|
Income tax recovery
(expense)
|
(4,703)
|
(258)
|
(3,783)
|
(1,022)
|
Net loss
|
(6,008)
|
(1,181)
|
(16,020)
|
(10,075)
|
Loss per share –
basic and diluted
|
(0.19)
|
(0.05)
|
(0.55)
|
(0.49)
|
|
|
|
|
|
Cash flow from
operations (2)
|
2,529
|
(1,707)
|
(3,733)
|
(4,314)
|
|
|
|
|
|
Production cost per
tonne (3)
|
252
|
286
|
299
|
300
|
Cash cost per silver
ounce payable net of byproducts ($/Ag oz)
|
12.73
|
14.36
|
15.38
|
13.01
|
All-in sustaining
cost ("AISC") per silver ounce payable ($/Ag oz)
|
21.19
|
26.76
|
26.46
|
23.57
|
|
|
|
|
|
Realized prices:
(4)
Silver – ($US/oz)
Lead – ($US/lb)
Zinc –
($US/lb)
|
24.46
0.87
1.21
|
17.12
0.87
1.04
|
21.59
0.83
1.08
|
16.07
0.88
1.12
|
(1)
|
Revenues are net of
treatment and refining charges ("TC/RCs").
|
(2)
|
Cash flow from
operations before changes in working capital.
|
(3)
|
Production cost per
tonne includes mining and milling costs excluding depletion and
amortization.
|
(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.
|
Revenues increased by 41% during Q4 2020, driven by a 39%
increase in silver ounces payable and a 43% increase in the average
realized silver price relative to the comparative period. Revenues
for the 12-month period were impacted by the Suspension.
Cost of sales in Q4 2020 is $0.4
million higher than Q4 2019 reflecting the volume impact of
a 22% increase in AgEq ounces sold in Q4 2020 partially offset by
the impact of operational efficiencies realized through 2020
including lower personnel costs and a lower-cost private
electricity contract that came into effect early in Q4 2020. Yearly
cost of sales decreased by $3.3
million or 12% in 2020 versus 2019 reflecting an 18%
reduction in AgEq ounces sold due to the Suspension, partly offset
by care and maintenance costs of $1.9
million incurred during the Suspension.
Gross profit of $1.6 million in
2020 reflects a $3.0 million
improvement over the prior year. Net loss increased by $4.8 million between Q4 2020 and Q4 2019 mainly
reflecting a $4.7 million non-cash
charge in deferred tax expense due to the de-recognition of
deferred-tax assets. The associated tax-loss carry-forwards remain
in force and are unaffected by this IFRS write-down. Yearly net
loss in 2020 increased by $5.9
million compared to 2019 mainly reflecting a $3.8 million non-cash charge in deferred tax
expense and a $2.8 million increase
in finance expenses including $2.0
million in interest expense on convertible debentures issued
in Q3 2020 and a US$6 million bridge
loan from Sprott Private Resource Lending borrowed in Q1 and repaid
in Q3 2020.
General and corporate administration expenses increased by
$2.1 million, including an increase
of $0.8 million related to non-cash
stock-based compensation and an increase of $1.3 million in administrative expenses,
including $0.6 million in corporate
development costs, $0.3 million in
salaries and wages and $0.2 million
in public company costs related to the convertible debenture
issuance and the listing on the NYSE American.
The $0.2 million increase in
exploration expense in 2020 primarily reflects increased
exploration activity at Silver City ($1.6
million increase in 2020) and work conducted on the
Kilgore project ($0.7 million since acquisition in Q2 2020),
partially offset by a delay of exploration activities in
Mexico ($2.2 million decrease from 2019). Work continued
on the Oakley project, which is
under option to and funded by Centerra Gold Inc.
AISC net of by-products per silver ounce payable increased by
$2.89 (or 12%) to $26.46 in 2020 (2019 – $23.57) driven by
(i) lower silver sales volumes (impact of $0.94 or 4%), (ii) care and maintenance costs of
$1.9 million during the Suspension,
(iii) a 110% or $3.6 million increase
in TC/RCs and (iv) a 11% or $1.5
million decrease in by-product credits relative to the prior
year. AISC also includes $3.8 million
related to sustaining capital expenditures including long-term
dewatering infrastructure.
The increased TC/RCs were in line with charges in the global
zinc and lead concentrate industry, which saw a marked increase in
TC/RCs start in 2019 that continued into 2020. TC/RCs dropped
marginally in Q3 2020 based on a renegotiated zinc offtake
agreement, but the operation incurred higher penalties for
deleterious elements, particularly antimony. After adjusting for
$1.9 million in care and maintenance
costs incurred during the Suspension, adjusted 2020 AISC is
$24.35, or 3% higher compared to
2019. Excluding non-cash items, AISC was $24.28 in 2020 (2019 – $22.26).
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 audited consolidated
financial statements for the years ended December 31, 2020 and 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 and EDGAR at
www.sec.gov.
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 year ended December 31,
2020, for a reconciliation of these measures to reported
IFRS results.
Operating Results &
Outlook
Operating performance for the periods indicated below was as
follows:
|
Q4
|
Q4
|
|
|
|
|
2020
|
2019
|
2020
|
2019
|
|
Tonnes of ore
mined:
|
21,455
|
19,622
|
66,501
|
74,876
|
|
Ore processed
(t):
|
22,626
|
19,828
|
65,567
|
73,797
|
|
Historical stockpile
processed (t):
|
-
|
-
|
-
|
1,450
|
|
Platosa ore processed
(t):
|
22,626
|
19,828
|
65,567
|
75,247
|
|
Blended head grade
(ore and historical stockpiles):
|
|
|
|
|
|
|
Silver
(g/t)
|
536
|
435
|
519
|
490
|
|
|
Lead (%)
|
5.42
|
4.84
|
5.37
|
4.75
|
|
|
Zinc (%)
|
6.12
|
6.39
|
6.57
|
6.82
|
|
Recoveries:
|
|
|
|
|
|
|
|
Silver (%)
|
91.2
|
91.7
|
91.4
|
89.9
|
|
|
Lead (%)
|
82.9
|
80.2
|
83.7
|
79.2
|
|
|
Zinc (%)
|
80.1
|
76.5
|
78.9
|
77.7
|
|
Production(1)
|
|
|
|
|
|
|
|
Silver –
(oz)
|
355,581
|
259,282
|
997,690
|
1,054,029
|
|
|
AgEq ounces
(oz)(2)
|
556,332
|
469,707
|
1,639,310
|
2,002,036
|
|
|
Lead –
(lb)
|
2,223,465
|
1,690,610
|
6,470,637
|
6,134,888
|
|
|
Zinc –
(lb)
|
2,452,728
|
2,062,018
|
7,488,825
|
8,425,221
|
|
Payable:(3)
|
|
|
|
|
|
|
|
Silver ounces –
(oz)
|
323,139
|
232,034
|
928,240
|
962,355
|
|
|
AgEq ounces
(oz)(2)
|
499,644
|
408,899
|
1,501,354
|
1,823,005
|
|
|
Lead –
(lb)
|
2,049,065
|
1,563,313
|
6,087,239
|
5,766,608
|
|
|
Zinc –
(lb)
|
2,088,975
|
1,614,046
|
6,442,712
|
7,410,202
|
|
San Sebastián ore
processed (t)
|
-
|
6,398
|
4,785
|
14,231
|
|
(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. Tonnes Mined and Ore processed are in
DMT.
|
(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 therefore differ from produced ounces.
|
(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.
|
In 2020, Platosa continued to outperform 2019 productivity while
reducing operating costs, improving safety performance and managing
the ongoing threat posed by COVID-19. In the second half of 2020,
the Company achieved record tonnes mined (43,332) and milled
(45,237) following the Suspension and restart in late Q2 2020.
Silver production in Q4 2020 increased by 37% to 355,581 oz (Q4
2019 – 259,282 oz), exceeding Q3 2020 as the strongest quarter of
silver production since Q2 2014.
During 2020, the Platosa operation realized improvements in
shift scheduling, mining methods, offtake arrangements and
electricity costs, while completing a phase-2 tailings dam raise
and strengthening the management and technical teams. Recoveries at
the Miguel Auza processing
facility improved on an annual basis, while plant reliability
substantially increased.
Lower electricity prices from the newly activated natural-gas
backed power contract at Platosa are expected to continue improving
the operation's economics, despite a price shock in mid-February 2021 that has since abated, but will
impact costs in Q1 2021.
COVID-19 Update
COVID-19 prevention, hygiene and safety measures, health
screening, travel restrictions, contact tracing, testing and
quarantine protocols are in place and have so far proven effective
in protecting the workforce from confirmed COVID-19 cases that
originated from community spread.
To date, there has been no material impact to production or the
shipment of concentrate from any of the Company's operations as a
result of COVID-19. Additionally, there has been no significant
disruption to the supply chain of the Company's operations.
Excellon continues to monitor and implement business continuity
measures to mitigate and minimize to the extent possible any
potential impacts of the pandemic that might emerge in our
operations or affect our procurement and commercial activities.
About Excellon
Excellon's vision is to create wealth by realizing strategic
opportunities through discipline and innovation for the benefit of
our employees, communities and shareholders. The Company is
advancing a precious metals growth pipeline that includes: Platosa,
Mexico's highest-grade silver mine
since production commenced in 2005; Kilgore, a high quality gold development
project in Idaho with strong
economics and significant growth and discovery potential; and an
option on Silver City, a high-grade epithermal silver district in
Saxony, Germany with 750 years of
mining history and no modern exploration. The Company also aims to
continue capitalizing on current market conditions by acquiring
undervalued projects.
Additional details on Excellon's 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 mineral resources estimates, 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. 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.
Cautionary Note to U.S. Investors: The terms
"mineral resource," "measured mineral resource," "indicated mineral
resource" and "inferred mineral resource," as used on Excellon's
website and in its press releases are Canadian mining terms that
are defined in accordance with National Instrument 43-101 –
Standards of Disclosure for Mineral Projects ("NI 43-101"). These
Canadian terms are not defined terms under United States Securities
and Exchange Commission ("SEC") Industry Guide 7 and are normally
not permitted to be used in reports and registration statements
filed with the SEC by U.S. registered companies. The SEC
permits U.S. companies, in their filings with the SEC, to disclose
only those mineral deposits that a company can economically and
legally extract or produce. Accordingly, note that
information describing the Company's "mineral resources" is not
directly comparable to information made public by U.S. companies
subject to reporting requirements under U.S. securities laws. U.S.
investors are urged to consider closely the disclosure in the
Company's Form 40-F which may be secured from the Company, or
online at http://www.sec.gov/edgar.shtml.
SOURCE Excellon Resources Inc.