TORONTO, May 13, 2021 /CNW/ - Excellon Resources
Inc. (TSX: EXN) (TSX: EXN.WT) (NYSE: EXN) and (FRA:
E4X2) ("Excellon" or the "Company") is pleased to
report financial results for the three-month period ended
March 31, 2021.
Q1 2021 Financial and Operational
Highlights
- Revenues increased by 76% to $9.8
million during Q1 2020 ($5.6
million in Q1 2020)
- Gross profit improved by $3.0
million to $1.8 million (Q1
2020 – loss of $1.2 million)
- Cost profile impacted by additional energy costs of
$0.6 million due to increase in
natural gas price during mid-February polar vortex in southwest
U.S.
- Total cash cost net of byproducts per silver ounce payable
decreased by 13% to $13.43 (Q1 2020 –
$15.35)
- AISC per silver ounce payable decreased by 7% to $24.34 (Q1 2020 – $26.28) or $18.67
excluding non-cash items, the cash component of annual compensation
grants and additional electricity costs associated with the polar
vortex
- Production cost per tonne increased by 2% to $297 per tonne (Q1 2020 – $292 per tonne)
- Cash and marketable securities of $8.3
million at March 31, 2021
(December 31, 2020 – $10.7 million)
- Other highlights during the quarter included:
-
- Positive underground drilling results at the Platosa Mine which
identified multiple significant opportunities to define additional
mineralization;
- High-grade silver discovery at Silver City (Grauer Wolf) and drilling results confirming
mineralization over 12 kilometres of strike within 36 kilometres of
open strike potential; and
- Doubling ground position at Silver City with the addition of
17,600 hectares of additional exploration licenses.
"Our team in Mexico delivered a
strong quarter, though with room for improvement," stated
Brendan Cahill, President
and CEO. "As previously disclosed, the polar vortex in
February had a sizeable impact on our cost profile, though our team
at Platosa did an excellent job mitigating the impact to a great
extent. Additionally, we see room for improvement in metal
recoveries, which will improve payable metals and by-product
credits. Looking toward the coming quarters, we are focused on
continuing our drilling programs around Platosa and on the
developing Platosa-style target 11 kilometres northwest at
Jaboncillo, while we ramp up drill
programs at Oakley and Silver City in the coming weeks."
Financial Results
Financial results for the three-month periods ended
March 31, 2021 and 2020 were as follows:
('000s of USD, except amounts per
share and per ounce)
|
Q1 2021
|
Q1 2020
|
Revenue
(1)
|
9,781
|
5,561
|
Production costs
|
(6,153)
|
(5,479)
|
Depletion and amortization
|
(1,790)
|
(1,269)
|
Cost of sales
|
(7,943)
|
(6,748)
|
Gross profit (loss)
|
1,838
|
(1,187)
|
|
|
|
Corporate
administration
|
(2,342)
|
(1,163)
|
Exploration
|
(1,073)
|
(373)
|
Other (1)
|
(651)
|
(605)
|
Net finance
cost
|
(725)
|
(2,091)
|
Income tax recovery
(expense)
|
31
|
(953)
|
Net loss
|
(2,922)
|
(6,372)
|
Loss per share –
basic and diluted
|
(0.09)
|
(0.28)
|
Cash flow from (used
in) operations (2)
|
919
|
(1,849)
|
Production cost per
tonne (3)
|
297
|
292
|
Cash cost per silver
ounce payable net of byproducts ($/Ag oz)
|
13.43
|
15.35
|
AISC per silver ounce
payable ($/Ag oz) (4)
|
24.34
|
26.28
|
Realized
prices:(5)
|
|
|
Silver –
($US/oz)
|
26.32
|
15.04
|
Lead –
($US/lb)
|
0.92
|
0.79
|
Zinc –
($US/lb)
|
1.25
|
0.90
|
(1)
|
Revenues are net of treatment and refining charges ("TC/RCs").
Refer to Note 18 of the Q1 2021 Condensed Consolidated Financial
Statements for detail of the comparative period reclassification of
foreign exchange differences on provisionally priced
sales.
|
(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)
|
AISC per silver ounce
payable excludes general and administrative and share-based payment
costs attributable to the Company's non-producing projects. The
comparative has been revised to conform with the current
allocation.
|
(5)
|
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 76% to $9.8
million during Q1 2021 (Q1 2020 – $5.6 million) driven by a 19% increase in
silver ounces payable and a 75% increase in the average realized
silver price relative to the comparative period.
Cost of sales, including depletion and amortization,
was $1.2 million higher than
Q1 2020. This difference is a result of an increase in energy
costs of $0.6 million incurred in
February 2021, due to a natural gas
price spike following a polar vortex in south Texas, an increase of $0.5 million in depletion and amortization
reflecting increased production and larger asset base, and the
volume impact of a 2% increase in silver equivalent ("AgEq") ounces
sold in Q1 2021.
The Company recorded a net loss of $2.9
million in Q1 2021 (Q1 2020 – net loss of $6.4 million), an improvement of $3.5 million primarily driven by increased
profitability from operations of $3.0
million over the comparative quarter. Administrative expense
increased by $0.5 million, reflecting
an increase in insurance expense combined with the timing of annual
compensation expenses; share-based payment expense increased by
$0.6 million in Q1 2021 as annual
grants were made in Q2 during 2020.
The $0.7 million increase in
exploration expenditures in Q1 2021 compared to Q1 2020 primarily
reflects increased drilling at Platosa ($0.3
million) and permitting activities on the Kilgore Project
($0.3 million). Work continued on the
Oakley Project, under option to Centerra Gold Inc.
Cash cost net of byproducts per silver ounce payable (or Total Cash Cost) decreased
by 13% to $13.43 in Q1 2021 ($15.35 in Q1 2020), driven by a
19% increase in silver ounces payable and a 23% increase in
byproduct credits, partially offset by additional energy costs of
$0.6 million as a result of the
natural gas price spike noted above. Treatment and refining charges
("TC/RCs") decreased by 17% on a per-ounce-basis, benefiting from
renegotiated offtake agreements and lower penalties for deleterious
elements through improved mill feed blending.
AISC per silver ounce payable decreased by 7% to $24.34 ($26.28 in
Q1 2020), driven by a 19% increase in silver ounces payable and a
$0.5 million decrease in sustaining
capital expenditures, partly offset by the increase in
administrative expenses and share-based payment costs as discussed
above. Excluding non-cash items, the cash component of annual
compensation grants and additional electricity costs associated
with the polar vortex, AISC during the period was $18.67 per silver ounce payable.
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 consolidated financial statements for
the three month periods ended March 31,
2021 and 2020, 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.com/edgar.
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 periods ended March 31, 2021 and 2020, for a reconciliation of
these measures to reported IFRS results.
Operating Results & Outlook
Operating performance
for the periods indicated below
was as follows:
|
Q1
|
Q1
|
|
2021
|
2020
|
Tonnes
mined:
|
21,212
|
19,899
|
Tonnes
milled:
|
21,764
|
19,042
|
Grades:
|
|
|
Silver (g/t)
|
524
|
542
|
Lead (%)
|
5.35
|
5.44
|
Zinc (%)
|
6.73
|
6.78
|
Recoveries:
|
|
|
Silver (%)
|
89.7
|
89.3
|
Lead (%)
|
81.8
|
82.8
|
Zinc (%)
|
74.7
|
74.9
|
Production(1)
|
|
|
Silver
– (oz)
|
328,747
|
296,281
|
AgEq ounces (oz)(2)
|
516,715
|
523,742
|
Lead – (lb)
|
2,099,741
|
1,890,456
|
Zinc – (lb)
|
2,412,458
|
2,131,034
|
Payable:(3)
|
|
|
Silver ounces – (oz)
|
291,967
|
246,062
|
AgEq ounces (oz)(2)
|
442,582
|
434,190
|
Lead – (lb)
|
1,859,932
|
1,514,285
|
Zinc – (lb)
|
1,802,430
|
1,805,672
|
San Sebastián ore processed (t)
|
-
|
4,785
|
(1)
|
Subject to adjustment
following settlement with concentrate purchaser.
|
(2)
|
AgEq ounces
established using average realized metal prices during the period
indicated, applied to the recovered metal content
of the concentrates. AgEq ounces produced during Q1 2021
were lower than Q1 2020 as silver prices increased significantly
more than base metal prices, resulting in base metal production
contributing less to silver equivalency.
|
(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.
|
Production in Q1 2021 improved relative to Q1 2020 as the
changes and enhancements made in mid-2020 continued to be refined.
Head grades and recoveries in Q1 2021 were consistent with Q1 2020,
although lower than Q3 and Q4 2020.
Plant improvements during Q1 2021 included rebuilt flotation
cells, drying filters, shift schedule modifications and training
and management of floor operations, which have begun to stabilize
and improve zinc recovery.
Improved maintenance practices and increased plant reliability
are expected to sustain high throughput in the upcoming quarters,
with opportunities to increase mill recoveries and further improve
the operation's economics.
COVID-19 Update
Excellon continues to implement measures to prevent COVID-19
among the workforce and local communities and to monitor the
effectiveness of these measures in mitigating any potential impact
on business activities. The Company's actions have been successful
to-date and the pandemic has not had any material impact on
production or shipment of concentrate.
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.