Ascendant Resources Inc. (TSX:ASND) (OTCQX:ASDRF)
(FRA:2D9) ("Ascendant" or the "Company”) announces production
results from its El Mochito mine for the second quarter of 2018
demonstrating continued operational improvements highlighted by an
average head grade of 6.3% ZnEq, and record contained metal
production for the quarter of 22.9 million ZnEq lbs, an increase of
7% over the first quarter 2018 and 49% over the second quarter
2017.
Q2 2018 Operational
Performance
During the second quarter of 2018, Ascendant
produced yet another record of contained zinc equivalent metal
production with production of 22.9 million ZnEq lbs, compared to
21.4 million ZnEq lbs in the first quarter of 2018 and 15.4 million
lbs in the second quarter of 2017. This represents Ascendant’s
sixth consecutive quarter of metal production growth. Zinc grades
showed a further improvement through the quarter increasing by 2%
from 4.2% zinc in Q1 2018 to 4.3% zinc in Q2 2017 (27% increase
from 3.4% zinc in Q2 2017). Silver grades similarly showed a slight
increase over the previous quarter. Lead grades were 5% lower at
1.5% in Q2 versus 1.6% in Q1 but were 15% higher than Q2 2017 when
the lead head grade was 1.3%. Recovery rates have modestly improved
over the previous quarter.
Increased conventional mining from the
high-grade Imperial, Barbasco, Port Royal and San Juan “chimney”
ore-bodies had a positive impact on grade for the quarter combined
with better dilution controls in the mantos areas. The success
experienced at the higher-grade Esperanza orebody in the first
quarter slowed into the second quarter as the number of working
faces increased but could not be accessed due to additional
ventilation requirements. This has now been addressed.
Milled production for the quarter was up
slightly (3%) at 192,428 tonnes compared to the first quarter 2018
production of 186,955 tonnes and up 28% versus Q2 2017 (150,785
tonnes). June’s performance was impacted by four days of lost
production caused by issues experienced with the shaft loading
pocket, a failure of a main bearing on the primary screen in the
plant and inclement weather which affected power to the mine. These
issues have since been remedied.
Overall, Ascendant continues to see higher
throughput rates with increased grade as it continues to focus on
dilution control and greater contribution from conventional mining
in the higher-grade chimneys. Management expects tonnes processed
and ore grades to continue trending higher over the course of the
year. This quarter also saw the largest contribution from long-hole
stoping since Ascendant gained control of the mine; the
introduction of this lower cost mining methodology is well ahead of
schedule at the mine and will continue to become a greater
percentage of production. The Company’s cash balance was US$11.3
million at June 30, 2018.
Two remaining bolters arrived and were made
operational during the quarter, setting the stage for increased
development moving forward. The Company expects delivery of the
final two trucks ordered early in Q3.
Operational performance for Q2 2018 relative to
Q1 2018 and 2017 is provided in the table below:
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2018 |
2017 |
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Units |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
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Ore Milled |
tonnes |
192,428 |
186,955 |
198,354 |
176,035 |
150,785 |
131,116 |
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Average Head Grade |
Zinc |
% |
4.3.% |
4.2% |
3.7% |
3.5% |
3.4% |
3.4% |
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Lead |
% |
1.5% |
1.6% |
1.4% |
1.5% |
1.3% |
1.3% |
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Silver |
g/t |
48 |
46 |
34 |
38 |
49 |
52 |
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Zinc equivalent grade* |
% |
6.3% |
6.1% |
5.3% |
5.4% |
5.5% |
5.6% |
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Average Recoveries |
Zinc |
% |
89.7% |
89.3% |
88.5% |
88.8% |
88.9% |
89.8% |
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Lead |
% |
79.1% |
76.7% |
74.6% |
73.7% |
72.3% |
76.9% |
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Silver |
% |
79.4% |
78.3% |
75.0% |
78.0% |
79.3% |
78.8% |
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Contained Metal Production |
Zinc |
000's
lbs |
16,343 |
15,301 |
14,133 |
12,100 |
9,933 |
8,888 |
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Lead |
000's
lbs |
5,109 |
5,125 |
4,556 |
4,175 |
3,216 |
2,957 |
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Silver |
ozs |
229,043 |
215,599 |
169,039 |
168,181 |
188,245 |
173,041 |
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Zinc equivalent metal* |
000's lbs |
22,926 |
21,412 |
19,576 |
17,495 |
15,377 |
13,672 |
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*Calculated
from average Q2 2018 metal prices of US$1.41/lb for zinc, US$1.08
for lead, and US$16.40 Ag for silver |
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President and CEO Chris Buncic stated: “We are pleased to
demonstrate yet another strong operational quarter with record
contained metal production exceeding the previous quarter’s record,
while at the same time delivering improved zinc equivalent grades.
The arrival of the remaining outstanding conventional mining
equipment enabled us to increase conventional mining benefitting
our volumes and grade profile. We will continue to focus on lower
cost mining methods and improved grade control to improve our
overall cost per tonne produced.”
Update on Long-Term Optimization Plans
at El Mochito
Since acquiring the El Mochito mine in December
2016, Ascendant’s primary objective was to rehabilitate the El
Mochito mine targeting increased production, reduced costs and
returning the mine to profitability in a stronger zinc commodity
price environment. During 2017, production grew by 81%, direct
operating cost were decreased by 31% and by the third quarter of
2017 the mine had achieved positive EBITDA and by the fourth
quarter positive Free Cash Flow. As can be seen by results above,
during 2018 the El Mochito mine has continued to see growth in
production volumes, costs have continued to decline, and the mine
continues to show improvement in almost all metrics.
In January of 2018 Ascendant management engaged
third party technical and engineering firms to assist with the
objective of making the El Mochito mine robust and profitable in
any reasonable zinc price environment. The recent completion of the
NI 43-101 Mineral Reserves and Resources Estimate and Technical
Report for El Mochito (see press release of April 10, 2018),
outlining Proven and Probable Reserves providing for a mine life of
more than 7 years, formed a solid foundation for this analysis.
Management is currently near the completion of
its detailed engineering and technical analysis, and expects that
once implemented, the optimization plans will position the mine to
deliver strong EBITDA and robust Free Cash Flow at consensus
long-term metal prices.
The focus of the analysis has been on lowering
sustainable operating and capital costs through underground mine
improvements, plant upgrades and improved long term water and
tailings management systems. A large part of the study is
focused on materially shortening the long-term haul distances of
the underground mining fleet as the new Reserves, Resources and
expected future exploration discoveries continue to extend the ore
body to the East of current mine infrastructure.
Full details are expected to be released during
the third quarter.
President and CEO Chris Buncic continued,
“During the second quarter, realized metal prices were lower than
anticipated impacting our expected cash flow generation, and this
remains so in the short-term due to global trade concerns and the
perceived uncertainty from the demand-side. We remain positive on
metal prices going forward but are cognizant of El Mochito’s
sensitivity to metal prices. As such, we continue to press for
further long-term operational improvements to drive our costs
lower, improve profitability in the short-term and set the mine on
a profitable path in any reasonable metals price environment. We
expect to be in a position to provide more details on our long-term
optimization plans shortly.”
Second Quarter 2018 Conference
Call
Ascendant plans to release second quarter 2018
financial results after market close on August 8, 2018. A
conference call will be held on August 9, 2018, at 10:00am EDT to
discuss second quarter 2018 operational and financial results.
Conference Call Details:Date of
Call: Thursday, August 9, 2018Time of Call: 10:00am EDTConference
ID: 3172066Dial-In Numbers:North American Toll-Free:
1-833-696-8362International: 1-612-979-9908
About Ascendant Resources
Inc.
Ascendant is a Toronto-based mining company
focused on its 100%-owned El Mochito zinc-lead-silver mine in
north-western Honduras, which has been in production since 1948.
After acquiring the mine in December 2016, Ascendant implemented a
rigorous optimization program aimed at restoring the historic
potential of the El Mochito mine. In 2017, the Company successfully
completed the operational turnaround with sustained production
reaching record levels and profitability restored. The Company
remains focused on cost reduction and further operational
improvements to drive robust free cash flow in 2018 and beyond.
Ascendant is also focused on expanding and upgrading known
resources through extensive exploration work for near-term growth.
With a significant land package of 11,000 hectares and an abundance
of historical data there are several regional targets providing
longer term exploration upside which could lead to further resource
growth. The Company is also engaged in the evaluation of producing
and development stage mineral resource opportunities, on an ongoing
basis. The Company's common shares are principally listed on the
Toronto Stock Exchange under the symbol "ASND". For more
information on Ascendant Resources, please visit our website
at www.ascendantresources.com.
Neither the Toronto Stock Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX) accepts responsibility for the adequacy or
accuracy of this release. For further information please
contact:Katherine PrydeDirector, Communications & Investor
RelationsTel: 888-723-7413
info@ascendantresources.com
Cautionary Notes to US
Investors
The information concerning the Company’s mineral
properties has been prepared in accordance with National Instrument
43-101 (“NI-43-101”) adopted by the Canadian Securities
Administrators. In accordance with NI-43-101, the terms “mineral
reserves”, “proven mineral reserve”, “probable mineral reserve”,
“mineral resource”, “measured mineral resource”, “indicated mineral
resource” and “inferred mineral resource” are defined in the
Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”)
Definition Standards for Mineral Resources and Mineral Reserves
adopted by the CIM Council on May 10, 2014. While the terms
“mineral resource”, “measured mineral resource”, “indicated mineral
resource” and “inferred mineral resource” are recognized and
required by NI 43-101, the U.S. Securities Exchange Commission
(“SEC”) does not recognize them. The reader is cautioned that,
except for that portion of mineral resources classified as mineral
reserves, mineral resources do not have demonstrated economic
value. Inferred mineral resources have a high degree of uncertainty
as to their existence and as to whether they can be economically or
legally mined. It cannot be assumed that all or any part of any
inferred mineral resource will ever be upgraded to a higher
category. Therefore, the reader is cautioned not to assume that all
or any part of an inferred mineral resource exists, that it can be
economically or legally mined, or that it will ever be upgraded to
a higher category. Likewise, you are cautioned not to assume that
all or any part of a measured or indicated mineral resource will
ever be upgraded into mineral reserves.
Readers should be aware that the Company’s
financial statements (and information derived therefrom) have been
prepared in accordance with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting
Standards Board and are subject to Canadian auditing and auditor
independence standards. IFRS differs in some respects from United
States generally accepted accounting principles and thus the
Company’s financial statements (and information derived therefrom)
may not be comparable to those of United States companies.
Forward Looking
Information
This news release contains "forward-looking statements" and
"forward-looking information" (collectively, "forward-looking
information") within the meaning of applicable Canadian securities
legislation. All information contained in this news release, other
than statements of current and historical fact, is forward-looking
information. Often, but not always, forward-looking information can
be identified by the use of words such as "plans", "expects",
"budget", "guidance", "scheduled", "estimates", "forecasts",
"strategy", "target", "intends", "objective", "goal",
"understands", "anticipates" and "believes" (and variations of
these or similar words) and statements that certain actions, events
or results "may", "could", "would", "should", "might" "occur" or
"be achieved" or "will be taken" (and variations of these or
similar expressions). Forward-looking information is also
identifiable in statements of currently occurring matters which may
continue in the future, such as "providing the Company with", "is
currently", "allows/allowing for", "will advance" or "continues to"
or other statements that may be stated in the present tense with
future implications. All of the forward-looking information in this
news release is qualified by this cautionary note.
Forward-looking information in this news release
includes, but is not limited to, statements regarding the
consistency of processing recovery levels, improvements of grades
in 2018, deployment of new mining equipment, increase in contained
metal production, maintenance of production rates, increase of mill
feed grades, reduction of costs, the ability to fully fund planned
development, exploration expenditures and the undertaking of
various long-term optimization programs. Forward-looking
information is not, and cannot be, a guarantee of future results or
events. Forward-looking information is based on, among other
things, opinions, assumptions, estimates and analyses that, while
considered reasonable by Ascendant at the date the forward-looking
information is provided, inherently are subject to significant
risks, uncertainties, contingencies and other factors that may
cause actual results and events to be materially different from
those expressed or implied by the forward-looking information. The
material factors or assumptions that Ascendant identified and were
applied by Ascendant in drawing conclusions or making forecasts or
projections set out in the forward-looking information include, but
are not limited to, the ability of the Company to maintain the
consistency of processing recovery levels, to improve grades in
2018, to deploy new mining equipment, increase contained metal
production, maintain production rates, increase mill feed grades,
reduce costs, fully fund planned development, exploration and
capital expenditures and undertake various long-term
optimization programs and other events that may affect Ascendant's
ability to develop its project; and no significant and continuing
adverse changes in general economic conditions or conditions in the
financial markets.
The risks, uncertainties, contingencies and
other factors that may cause actual results to differ materially
from those expressed or implied by the forward-looking information
may include, but are not limited to, risks generally associated
with the mining industry, such as economic factors (including
future commodity prices, currency fluctuations, energy prices and
general cost escalation), uncertainties related to the development
and operation of Ascendant's projects, dependence on key personnel
and employee and union relations, risks related to political or
social unrest or change, rights and title claims, operational risks
and hazards, including unanticipated environmental, industrial and
geological events and developments and the inability to insure
against all risks, failure of plant, equipment, processes,
transportation and other infrastructure to operate as anticipated,
compliance with government and environmental regulations, including
permitting requirements and anti-bribery legislation, volatile
financial markets that may affect Ascendant's ability to obtain
additional financing on acceptable terms, the failure to obtain
required approvals or clearances from government authorities on a
timely basis, uncertainties related to the geology, continuity,
grade and estimates of mineral reserves and resources, and the
potential for variations in grade and recovery rates, uncertain
costs of reclamation activities, tax refunds, hedging transactions,
as well as the risks discussed in Ascendant's most recent Annual
Information Form on file with the Canadian provincial securities
regulatory authorities and available at www.sedar.com.
Should one or more risk, uncertainty,
contingency, or other factor materialize, or should any factor or
assumption prove incorrect, actual results could vary materially
from those expressed or implied in the forward-looking information.
Accordingly, the reader should not place undue reliance on
forward-looking information. Ascendant does not assume any
obligation to update or revise any forward-looking information
after the date of this news release or to explain any material
difference between subsequent actual events and any forward-looking
information, except as required by applicable law.
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