TORONTO, Aug. 1, 2019 /CNW/ - Excellon Resources
Inc. (TSX:EXN; OTC:EXLLF) ("Excellon" or the "Company") is
pleased to report financial results for the three- and six-month
periods ended June 30, 2019.
Q2 2019 Financial Highlights (compared to Q2 2018)
- All-in sustaining cost per Ag oz payable ("AISC") excluding
non-cash items of $16.11 versus
$21.97 in Q1 2019 (Q2 2018 –
$7.15)
- Strong revenue of $8.7 million
despite lower metal prices (Q2 2018 – $9.9
million)
- Silver equivalent ("AgEq") production of 582,937 ounces (Q2
2018 – 637,205 AgEq ounces)
- AgEq ounces payable sold of 660,292 (Q2 2018 – 568,370 AgEq
ounces payable)
- Mined tonnage 30% higher in H1 2019 versus H2 2018
- Gross profit of $0.7 million (Q2
2018 – $3.9 million)
- Total cash cost per Ag oz payable of $9.18 (Q2 2018 – negative $1.07)
- Net loss of $2.2 million or
$0.02/share (Q2 2018 – net income of
$1.3 million or $0.01/share)
- Net working capital totaled $3.8
million at June 30, 2019
(March 31, 2019 – $5.5 million), with an additional C$0.9 million pending from $0.50 warrants expiring November 27, 2019
"During the recent period of low metal prices, we continued to
make capital investments and advance exploration programs at both
of our projects, leaving us well positioned for the improving
silver price environment that we are now seeing," stated
Brendan Cahill, President and CEO.
"Our ongoing optimization work has delivered results, reducing AISC
by 27% quarter-over-quarter. We still have a number of
opportunities to follow-up on to further reduce costs and and
increase metal production. Toll milling of ore from Hecla's San Sebastian Mine commenced in Q2 and
is expected to ramp up in Q3, bolstering cash flow. With silver
prices now almost $1.50/ounce higher
than the average price realized during Q2, we will continue to
focus on increasing cash flow and exploring for discoveries at both
Platosa and Evolución."
Financial Results
Financial results for the three- and six-month periods ended
June 30, 2019 and 2018 were as
follows:
('000s of USD, except
amounts per share
and per ounce)
|
Q2
2019
|
Q2
2018
|
6-Mos
2019
|
6-Mos
2018
|
Revenue
(1)
|
8,674
|
9,877
|
13,853
|
15,788
|
Production
costs
|
(6,797)
|
(5,173)
|
(11,409)
|
(9,132)
|
Depletion and
amortization
|
(1,149)
|
(854)
|
(2,318)
|
(2,136)
|
Cost of
sales
|
(7,946)
|
(6,027)
|
(13,727)
|
(11,268)
|
Gross profit
(loss)
|
728
|
3,850
|
126
|
4,520
|
|
|
|
|
|
Corporate
administration
|
(1,028)
|
(1,428)
|
(2,389)
|
(2,905)
|
Exploration
|
(967)
|
(1,053)
|
(1,972)
|
(1,761)
|
Other
|
34
|
(497)
|
(240)
|
(415)
|
Net finance
cost
|
(335)
|
(409)
|
(387)
|
615
|
Income tax recovery
(expense)
|
(640)
|
845
|
(1,131)
|
(22)
|
Net income
(loss)
|
(2,208)
|
1,254
|
(5,993)
|
32
|
Income (loss) per
share – basic
|
(0.02)
|
0.01
|
(0.06)
|
0.00
|
|
|
|
|
|
Cash flow from (used
in) operations (2)
|
208
|
2,253
|
(769)
|
2,724
|
Cash flow from (used
in) operations per share – basic
|
0.00
|
0.02
|
(0.01)
|
0.03
|
|
|
|
|
|
Production cost per
tonne (3)
|
304
|
225
|
289
|
227
|
Cash cost per silver
ounce payable net of byproducts ($/Ag oz)
|
9.18
|
(1.07)
|
10.06
|
0.90
|
All-in sustaining
cost ("AISC") per silver ounce payable ($/Ag oz)
|
16.89
|
9.75
|
19.82
|
12.21
|
Realized
prices:(4)
|
|
|
|
|
Silver –
($US/oz)
|
14.93
|
16.56
|
14.95
|
16.54
|
Lead –
($US/lb)
|
0.85
|
1.08
|
0.86
|
1.08
|
Zinc –
($US/lb)
|
1.23
|
1.41
|
1.25
|
1.42
|
|
(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 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.
|
Net revenues decreased by 12% to $8.7
million in Q2 2019 ($9.9
million in Q2 2018) due to a combination of significantly
lower realized metal prices (Ag -10%, Pb -22% and Zn -13%)
partially offset by higher AgEq ounces payable of 660,292 sold
(568,370 in Q2 2018).
Cost of sales, including depletion and amortization, increased
32% between Q2 2019 and Q2 2018 due to increased tonnage mined,
higher electricity prices, inventory variance of $0.6 million due to the processing of stockpiled
material from Q1 2019 and higher depreciation and amortization cost
of $0.3 million.
The Company recorded a net loss of $2.2
million in Q2 2019 (Q2 2018 – net income of $1.3 million), with the contributors being lower
revenues as a result of lower metal prices, increased cost of sales
and a $1.5 million difference in
deferred income taxes.
Exploration drilling continued on the Platosa property with
5,495 metres drilled in Q2 2019 (6,221 metres in Q2 2018),
resulting in slightly lower exploration expenses than in Q2
2018.
Cash cost net of by-products per silver ounce payable (or Total
Cash Cost) of $9.18 in Q2 2019 was
higher due to a combination of lower by-product credits due
to materially lower metal prices, offset by higher silver ounces
recognized in the quarter.
AISC net of byproducts per silver ounce payable in Q2 2019 of
$16.89 resulted from higher Total
Cash Cost as described above (Q2 2018 – $9.75). AISC excluding non-cash items of
$16.11 in Q2 2019 was 27% lower than
Q1 2019 of $21.97.
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 and six
month periods ended June 30, 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 year period ended June 30,
2019, for a reconciliation of these measures to reported
IFRS results.
Operating Highlights
Operating performance for the periods indicated below was as
follows:
|
Q2
|
Q2
|
6-Mos
|
6-Mos
|
|
2019
|
2018
|
2019
|
2018
|
Tonnes of ore
mined:
|
18,717
|
16,146
|
38,801
|
29,930
|
Tonnes of ore
processed:
|
19,964
|
16,580
|
36,733
|
29,601
|
Tonnes of historical
stockpile processed:
|
-
|
6,291
|
1,450
|
12,155
|
Total tonnes
processed:
|
19,964
|
22,872
|
38,183
|
41,756
|
Ore
grades:
|
|
|
|
|
|
Silver
(g/t)
|
514
|
507
|
523
|
478
|
|
Lead (%)
|
4.97
|
5.67
|
4.99
|
5.27
|
|
Zinc (%)
|
7.40
|
8.38
|
7.67
|
8.32
|
Historical stockpile
grades:
|
|
|
|
|
|
Silver
(g/t)
|
-
|
172
|
123
|
174
|
|
Lead (%)
|
-
|
1.76
|
1.22
|
1.68
|
|
Zinc (%)
|
-
|
2.38
|
1.44
|
2.39
|
Blended head grade
(ore and historical stockpiles):
|
|
|
|
|
|
Silver
(g/t)
|
514
|
415
|
508
|
390
|
|
Lead (%)
|
4.97
|
4.59
|
4.85
|
4.23
|
|
Zinc (%)
|
7.40
|
6.73
|
7.44
|
6.59
|
Recoveries:
|
|
|
|
|
|
Silver (%)
|
90.6
|
89.6
|
90.2
|
89.2
|
|
Lead (%)
|
83.6
|
80.2
|
79.5
|
80.8
|
|
Zinc (%)
|
79.6
|
82.2
|
78.9
|
82.9
|
Production:(1)
|
|
|
|
|
|
Silver –
(oz)
|
276,805
|
277,701
|
537,249
|
472,163
|
|
AgEq ounces
(oz)(2)
|
582,937
|
637,205
|
1,105,198
|
1,119,284
|
|
Lead –
(lb)
|
1,763,316
|
1,874,967
|
3,139,740
|
3,123,385
|
|
Zinc –
(lb)
|
2,499,403
|
2,810,564
|
4,709,028
|
5,064,014
|
Payable:(3)
|
|
|
|
|
|
|
Silver ounces –
(oz)
|
328,778
|
249,309
|
502,972
|
415,385
|
|
AgEq ounces (oz)
(2)
|
660,292
|
568,370
|
1,043,730
|
975,364
|
|
Lead –
(lb)
|
2,130,372
|
1,773,097
|
3,021,084
|
2,912,762
|
|
Zinc –
(lb)
|
2,554,290
|
2,392,204
|
4,474,024
|
4,226,947
|
|
(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.
|
(3)
|
Payable metal is
based on the metals shipped and sold during the period and may
differ from production due to these reasons.
|
During Q2 2019, operations at Platosa accessed multiple ore
faces. Efficiencies implemented in previous quarters continued to
deliver results with lower dilution, higher grades and steady metal
production rates. As a result, payable metals increased and average
tonnes per day ("tpd") decreased to 213 tpd in Q2 2019 versus 226
tpd in Q1 2019. Total tonnage processed of 19,964 tonnes in Q2 2019
was 13% lower relative to Q2 2018. Production for H1 2019 was
generally in line with H1 2018.
Mining operations are expected to continue at a steady rate as
development has progressed towards the next production horizon in
levels 916 in Manto 623 and 913 in Manto Pierna. The Company
will continue to implement efficiencies underground to improve
dilution and grades. As previously discussed, minor
adjustments at the Miguel Auza
processing facility are ongoing and the mill is processing a bulk
sample from Hecla's San Sebastian
Mine.
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.