Ero Copper Corp. (TSX: ERO) (“Ero” or the
“Company”) today is pleased to announce its financial results for
the three months ended March 31, 2021. Management will host a
conference call tomorrow, Wednesday, May 5, 2021, at 11:30 a.m.
Eastern time to discuss the results. Dial-in details for the call
can be found near the end of this press release.
HIGHLIGHTS
- Record quarterly
copper production of 12,638 tonnes and record quarterly C1 cash
costs(*) of $0.49 per pound of copper produced driven by strong
operational performance including higher grade versus budget at
both Pilar and Vermelhos underground mine;
- Strong quarterly
gold production of 9,451 ounces from the Santo Antonio Vein at the
NX Gold mine at C1 cash costs(*) of $487 per ounce of gold produced
and All-in Sustaining Costs(*) of $643 per ounce of gold
produced;
- Record quarterly
adjusted EBITDA(*) and cash flow from operations of $86.7 million
and $62.1 million, respectively;
- Adjusted net income
attributable to owners of the Company(*) of $56.3 million ($0.61
per share on a diluted basis);
- Total cash and cash
equivalents of $84.6 million, a $22.1 million quarter-on-quarter
improvement, and;
- Reiterating
full-year production, operating cost and capital expenditure
guidance for 2021.
Commenting on the results, David Strang, CEO,
stated, “We have started the year off with considerable momentum,
achieving record quarterly copper production and financial
performance, a notable accomplishment considering the challenging
operating environment our Brazilian colleagues continue to face in
mitigating the impacts of COVID-19. As a Company, we are proud of
the efforts our team is making to provide critical support to our
local communities, and this will remain a top priority this year.
At the same time, we are successfully advancing all of our growth
initiatives, which, upon completion, will serve to contribute to
the long-term and sustainable future of our mines and the regions
in which we operate.
“As evidenced by our most recent exploration
release, we are making strides in further showcasing the potential
and optionality of the Curaçá Valley. So far in 2021, our teams
have identified one new discovery beneath the Vermelhos Mine and
two new mineralized systems in the Curaçá Valley that have the
potential to both extend mine life and support higher mill
throughput rates in the future. The discovery beneath the Vermelhos
Mine, known as the ‘Novo Zone’, is a high-grade lens that has the
potential to improve life-of-mine grades in the near-term and
increase overall mine life of the Vermelhos Mine.
“We have also made significant progress around
the ongoing optimization initiatives of our Boa Esperanҫa Project
and expect to provide an update on what this opportunity looks like
during the third quarter. As a reminder, the 2017 feasibility study
outlined a low-capital project producing an average of
approximately 21,000 tonnes of payable copper per year over a 7.5
year mine life, resulting in a 32.7% internal rate of return. We
expect to improve upon this significantly in our 2021 update.
“Other growth projects, including exploration at
our NX Gold Mine, with ten drill rigs in operation, and our
Platinum Group Metals study, continue to progress despite extended
backlogs of assay results at third-party assay labs associated with
the COVID-19 pandemic. With strong tailwinds building around a
de-carbonized future, which is heavily dependent on copper, we are
well positioned as a Company to drive incremental shareholder value
through low capital-intensity growth projects across our
portfolio.”
*Earnings before interest, taxes, depreciation
and amortization (“EBITDA”), Adjusted EBITDA, Adjusted net income
attributable to owners of the Company, Adjusted net income per
share attributable to owners of the Company, C1 Cash Costs per
pound of copper produced, C1 Cash Costs per ounce of gold produced
and All-in Sustaining Costs (“AISC”) per ounce of gold produced are
non-IFRS measures – see the Notes section of this press release for
additional information. C1 Cash Costs per pound of copper produced
are net of by-product credits from metal produced at the MCSA
Mining Complex. AISC per ounce of gold produced are net of
by-product credits from metal produced at the NX Gold Mine.
OPERATIONS & EXPLORATION HIGHLIGHTS
- Mining
& Milling Operations – record operating performance
driven by high copper grades
- The MCSA Mining
Complex processed 597,594 tonnes of ore grading 2.30% copper,
producing record quarterly 12,638 tonnes of copper in concentrate
after metallurgical recoveries of 92.0%.
- The NX Gold Mine
processed 37,613 tonnes grading 8.26 grams per tonne, producing
9,451 ounces of gold and 5,794 ounces of silver as a by-product
after metallurgical recoveries of 94.7%.
- Exploration
Activities at the MCSA Mining Complex – aggressive
exploration program generating promising results
- Regional
Exploration Program
- Two new mineralized
systems identified, each measuring between 800 meters and 2.2
kilometers in strike length.
- Six geochemistry
teams, four ground gravity teams and three ground induced
polarization teams dedicated to refining drill locations within
these new systems.
- Additional
exploration activity throughout the Curaçá Valley on other untested
high-priority target areas remains ongoing.
- In-Mine and Near
Mine Exploration Programs
- Drilling below the
Deepening Extension Zone of the Pilar Mine has identified
high-grade extensions, including the deepest intercept drilled to
date, located approximately 150 meters below the limit of the 2020
inferred mineral resource shell.
- A newly discovered
high-grade lens, known as the “Novo Zone”, has been identified
approximately 200 meters beneath the main Vermelhos orebodies.
- A near-development,
high-grade structure located 15 meters south of existing
development within the Toboggan orebody of the Vermelhos Mine was
also identified by recent exploration activity.
- Past Producing Mine
Re-Evaluation
- Focused on
evaluating potential for development of high-grade targets within
fully permitted, past producing mines in the Curaçá Valley.
- Drilling underway
at Lagoa da Mina, the northern portion of the Angicos Mine (within
the Surubim District) and at Suçuarana North (within the Pilar
District).
- Additional
exploration activities targeting high-grade mineralization beneath
the Surubim Mine is expected to commence in Q2 2021.
- Corporate
Highlights – strong balance sheet supportive of organic
growth initiatives
- Conclusion of
ongoing studies on the potential optimization of the Boa Esperança
Project is expected in early Q3. The 2017 feasibility study
outlined a low-capital intensity project producing an average of
approximately 21,000 tonnes of payable copper per year over a
7.5-year mine life, resulting in a 32.7% internal rate of return.
The Company expects to improve upon this in the 2021 update.
- As previously
disclosed, the Company amended its US$75 million senior secured
amortizing non-revolving credit facility and US$75 million senior
secured revolving credit facility (collectively the “Prior
Facilities”) with a US$150 million senior secured revolving credit
facility payable in a bullet at maturity, on March 31, 2025 (the
“Revolving Credit Facility”). The amendment reduces the Company’s
cost of borrowing depending on the Company’s consolidated leverage
ratio, and eliminates principal payments previously due in 2022,
2023 and 2024 under the Prior Facilities. Additional detail is
provided later in this press release.
- The Company
continues to have no material disruption to operations, supply
chains or sales channels as a result of the COVID-19 pandemic. The
Company has taken extraordinary measures to mitigate the possible
impact of COVID-19 on its workforce and operations and to provide
critical support to local communities in Brazil ranging from the
donation of medical supplies and COVID-19 test kits to food
assistance for families impacted by the pandemic.
OPERATING AND FINANCIAL HIGHLIGHTS
|
|
3 months endedMar. 31, 2021 |
|
3 months ended Dec. 31, 2020 |
|
3 months endedMar. 31, 2020 |
Operating Highlights |
|
|
|
|
|
|
Copper (MCSA Operations) |
|
|
|
|
|
|
Ore Processed (tonnes) |
|
|
597,594 |
|
|
483,447 |
|
|
607,959 |
|
Grade (% Cu) |
|
|
2.30 |
|
|
2.26 |
|
|
1.95 |
|
Cu Production (tonnes) |
|
|
12,638 |
|
|
10,018 |
|
|
10,657 |
|
Cu Production (000 lbs) |
|
|
27,863 |
|
|
22,086 |
|
|
23,495 |
|
Cu Sold in Concentrate (tonnes) |
|
|
12,469 |
|
|
10,265 |
|
|
10,432 |
|
Cu Sold in Concentrate (000 lbs) |
|
|
27,488 |
|
|
22,629 |
|
|
22,999 |
|
C1 Cash Cost of Cu Produced (per lb)(1) |
|
$ |
0.49 |
|
$ |
0.69 |
|
$ |
0.71 |
|
Gold (NX Gold Operations) |
|
|
|
|
|
|
Au Production (oz) |
|
|
9,451 |
|
|
10,789 |
|
|
7,866 |
|
C1 Cash Cost of Au Produced (per oz)(1) |
|
$ |
487 |
|
$ |
405 |
|
$ |
594 |
|
AISC of Au Produced (per oz) (1) |
|
$ |
643 |
|
$ |
608 |
|
$ |
750 |
|
Financial Highlights ($ in millions, except per share
amounts) |
|
|
|
|
|
Revenues |
|
$ |
122.5 |
|
$ |
91.2 |
|
$ |
67.7 |
|
Gross
Profit |
|
$ |
82.8 |
|
$ |
58.3 |
|
$ |
30.7 |
|
EBITDA(1) |
|
$ |
55.2 |
|
$ |
91.3 |
|
$ |
(50.6 |
) |
Adjusted EBITDA(1) |
|
$ |
86.7 |
|
$ |
67.2 |
|
$ |
33.4 |
|
Cash
Flow from Operations |
|
$ |
62.1 |
|
$ |
38.6 |
|
$ |
37.3 |
|
Net
Income (loss) |
|
$ |
32.1 |
|
$ |
66.3 |
|
$ |
(53.0 |
) |
Net
income (loss) attributable to owners of the Company |
|
$ |
31.7 |
|
$ |
65.8 |
|
$ |
(52.8 |
) |
Per share (basic) |
|
$ |
0.36 |
|
$ |
0.75 |
|
$ |
(0.62 |
) |
Per share (diluted) |
|
$ |
0.34 |
|
$ |
0.71 |
|
$ |
(0.62 |
) |
Adj.
net income attributable to owners of the Company(1) |
|
$ |
56.3 |
|
$ |
37.4 |
|
$ |
20.8 |
|
Per share (basic) |
|
$ |
0.64 |
|
$ |
0.43 |
|
$ |
0.24 |
|
Per share (diluted) |
|
$ |
0.61 |
|
$ |
0.40 |
|
$ |
0.23 |
|
Cash
and Cash Equivalents |
|
$ |
84.6 |
|
$ |
62.5 |
|
$ |
44.3 |
|
Working Capital (Deficit)(1) |
|
$ |
63.5 |
|
$ |
35.8 |
|
$ |
(12.4 |
) |
Net
Debt(1) |
|
$ |
74.5 |
|
$ |
105.6 |
|
$ |
140.1 |
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes
(1) EBITDA,
Adjusted EBITDA, Adjusted net income (loss) attributable to owners
of the Company, Adjusted net income (loss) per share attributable
to owners of the Company, Net Debt, Working Capital (Deficit), C1
cash cost of copper produced (per lb), C1 cash cost of gold
produced (per ounce) and AISC of gold produced (per ounce) are
non-IFRS measures – see the Notes section of this press release for
a discussion on non-IFRS Measures.
ADJUSTED EBITDA & NET INCOME (LOSS)
RECONCILIATION
($ in
thousands) |
|
3 months endedMar. 31, 2021 |
|
|
|
Adjusted EBITDA |
|
$ |
86,694 |
|
Adjustments: |
|
|
Unrealized foreign exchange gain (loss) on USD denominated debt in
MCSA |
|
|
(7,831 |
) |
Unrealized foreign exchange gain (loss) on derivative
contracts |
|
|
(16,951 |
) |
Realized foreign exchange gain (loss) on derivative contracts |
|
|
(5,711 |
) |
Share based compensation and other |
|
|
(478 |
) |
Incremental costs in response to COVID-19 pandemic |
|
|
(556 |
) |
EBITDA |
|
$ |
55,167 |
|
|
|
|
Adjusted net income
attributable to owners of the Company |
|
$ |
56,335 |
|
Adjustments for non-cash items
(attributable to owners of the Company): |
|
|
Unrealized foreign exchange gain (loss) on USD denominated debt in
MCSA |
|
|
(7,800 |
) |
Unrealized foreign exchange gain (loss) on derivative contracts,
net of tax |
|
|
(14,299 |
) |
Unrealized gain on interest rate derivative |
|
|
415 |
|
Share based compensation |
|
|
(2,346 |
) |
Incremental costs in response to COVID-19 pandemic |
|
|
(556 |
) |
Reported net income attributable to owners of the
Company |
|
$ |
31,749 |
|
|
|
|
|
|
CREDIT FACILITIES AMENDMENT DETAILS
As previously disclosed, the Company amended its
Credit Agreement with The Bank of Nova Scotia (“Scotiabank”) and
Bank of Montreal (“BMO”) on March 16, 2021 to amend the Prior
Facilities with the Revolving Credit Facility, payable in a bullet
at maturity on March 31, 2025. Benefits of the amendment include a
reduction of up to 25 basis points in the Company’s cost of
borrowing, depending on the Company’s consolidated leverage
ratio.
The Revolving Credit Facility will bear interest
on a sliding scale at a rate of LIBOR plus 2.25% to 4.25% based on
the Company’s consolidated leverage ratio at the time. Commitment
fees for any undrawn portion of the Revolving Credit Facility will
also be on a sliding scale between 0.56% to 1.06%.
The Revolving Credit Facility includes standard
and customary terms and conditions with respect to fees,
representations, warranties, and financial covenants that remain
unchanged from prior amendments. Scotiabank is Joint Lead Arranger,
Sole Bookrunner and Administrative Agent and BMO is Joint Lead
Arranger and Syndication Agent.
A copy of the amendment to the Credit Agreement
has been filed on SEDAR (www.sedar.com).
2021 PRODUCTION OUTLOOK
The Company is reaffirming its 2021 production
guidance. Copper production for 2021 is expected to be equally
weighted between the first and second halves of the year with lower
Q2 and Q3 copper production due to preventative mill maintenance
scheduled during those periods as the Company prepares for expanded
operations, including the restart of the Surubim open pit mine in
H2 2021. Gold production from NX Gold for 2021 is expected to come
from ore mined from the Santo Antonio Vein.
|
2021
Guidance(1) |
MCSA Mining Complex |
|
Tonnes Processed |
2,700,000 |
|
Copper Grade (% Cu) |
1.75 |
% |
Copper
Recovery (%) |
93.0 |
% |
Cu Production Guidance (tonnes) |
42.0 – 45.0 |
|
|
|
NX Gold Mine |
|
Tonnes Processed |
167,000 |
|
Gold Grade (gpt) |
7.20 |
|
Gold
Recovery (%) |
92.0 |
% |
Au Production Guidance (000 ounces) |
34.5 – 37.5 |
|
|
|
(1) Guidance is based on certain estimates
and assumptions, including but not limited to, mineral reserve
estimates, grade and continuity of interpreted geological
formations and metallurgical performance. Please refer to the
Company’s SEDAR filings, including the Annual Information Form for
the year ended December 31, 2020 and dated March 16, 2021 (the
“AIF”), for complete risk factors.
2021 CASH COST GUIDANCE
The Company is reaffirming its 2021 cash cost
guidance, which assumes a USD:BRL foreign exchange rate of 5.00,
gold price of $1,750 per ounce and silver price of $20.00 per
ounce.
|
2021 Guidance |
MCSA Mining Complex C1 Cash Cost Guidance (US$/lb)(1) |
$0.75 – $0.85 |
NX Gold Mine C1 Cash Cost Guidance (US$/oz)(1) |
$500 – $600 |
NX Gold Mine All-in Sustaining Cost (AISC) Guidance
(US$/oz)(1) |
$875 – $975 |
|
|
(1) C1 Cash Costs and AISC are a non-IFRS
measures – see the Notes section of this press release for
additional information.
2021 CAPITAL EXPENDITURE GUIDANCE
The Company is reiterating its 2021 capital
expenditure guidance, which assumes a USD:BRL foreign exchange rate
of 5.00 and has been presented below in USD millions.
MCSA Operations |
|
2021 Guidance |
Pilar Mine and Caraíba Mill Complex (excluding Deepening Extension
Project) |
|
$45.0 – $50.0 |
Deepening Extension
Project |
|
$12.5 – $15.0 |
Vermelhos Mine &
District(1) |
|
$14.0 – $16.0 |
Surubim Open Pit Mine |
|
$10.0 – $12.0 |
Boa
Esperanҫa Project |
|
$1.0 – $1.5 |
Capital Expenditure Guidance |
|
$82.5 – $94.5 |
Curaçá Valley Exploration |
|
$30.0 – $35.0 |
|
|
|
NX Gold Mine |
|
2021 Guidance |
Capital Expenditure Guidance |
|
$13.0 – $15.0 |
Exploration |
|
$8.0 – $10.0 |
Total, NX Gold Mine |
|
$21.0 – $25.0 |
|
|
|
(1) Vermelhos District includes open pit mining
infrastructure expenditures of approximately US$6.0 million in
2021.
CONFERENCE CALL DETAILS
The Company will hold a conference call on
Wednesday, May 5, 2021 at 11:30 am Eastern time (8:30 am Pacific
time) to discuss these results.
Date: |
Wednesday, May 5, 2021 |
Time: |
11:30 am Eastern time (8:30 am Pacific time) |
Dial in: |
North America: 1-800-319-4610, International: +1-604-638-5340please
dial in 5-10 minutes prior and ask to join the call |
|
|
Replay |
North America: 1-800-319-6413, International: +1-604-638-9010 |
Replay Passcode: |
6549 |
|
|
NOTES
Non-IFRS measures
Financial results of the Company are prepared in
accordance with IFRS. The Company utilizes certain non-IFRS
measures, including C1 cash cost of copper produced (per lb), C1
cash costs of gold produced (per ounce), AISC of gold produced (per
ounce), EBITDA, Adjusted EBITDA, Adjusted net income attributable
to owners of the Company, Adjusted net income per share, net debt
and working capital, which are not measures recognized under IFRS.
The Company believes that these measures, together with measures
determined in accordance with IFRS, provide investors with an
improved ability to evaluate the underlying performance of the
Company. Non-IFRS measures do not have any standardized meaning
prescribed under IFRS, and therefore they may not be comparable to
similar measures employed by other companies. The data is intended
to provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
C1 Cash Cost of copper produced (per
lb.)
C1 cash cost of copper produced (per lb) is the
sum of production costs, net of capital expenditure development
costs and by-product credits, divided by the copper pounds
produced. C1 cash costs reported by the Company include treatment,
refining charges, offsite costs, and certain tax credits relating
to sales invoiced to the Company’s Brazilian customer on sales.
By-product credits are calculated based on actual precious metal
sales (net of treatment costs) during the period divided by the
total pounds of copper produced during the period. C1 cash cost of
copper produced per pound is a non-IFRS measure used by the Company
to manage and evaluate operating performance of the Company’s
operating mining unit, and is widely reported in the mining
industry as benchmarks for performance, but does not have a
standardized meaning and is disclosed in addition to IFRS
measures.
C1 Cash Cost of gold produced (per
ounce)
C1 cash cost of gold produced (per ounce) is the
sum of production costs, net of capital expenditure development
costs and silver by-product credits, divided by the gold ounces
produced. By-product credits are calculated based on actual
precious metal sales during the period divided by the total ounces
of gold produced during the period. C1 cash cost of gold produced
per ounce is a non-IFRS measure used by the Company to manage and
evaluate operating performance of the Company’s operating mining
unit and is widely reported in the mining industry as benchmarks
for performance but does not have a standardized meaning and is
disclosed in addition to IFRS measures.
All-in Sustaining Cost of gold produced (per
ounce)
All-in sustaining cost of gold produced (per
ounce) is the sum of production costs, site general and
administrative costs, accretion of mine closure and rehabilitation
provision, sustaining capital expenditures, sustaining leases, and
royalties and production taxes, net of silver by-product credits,
divided by the gold ounces produced. By-product credits are
calculated based on actual precious metal sales during the period
divided by the total ounces of gold produced during the period.
All-in sustaining cost of gold produced per ounce is a non-IFRS
measure used by the Company to manage and evaluate operating
performance of the Company’s operating mining unit and is widely
reported in the mining industry as benchmarks for performance but
does not have a standardized meaning and is disclosed in addition
to IFRS measures.
Earnings before interest, taxes,
depreciation and amortization (EBITDA) and Adjusted
EBITDA
EBITDA represents earnings before interest
expense, income taxes, depreciation, and amortization. Adjusted
EBITDA includes further adjustments for non-recurring items and
items not indicative to the future operating performance of the
Company. The Company believes EBITDA and adjusted EBITDA are
appropriate supplemental measures of debt service capacity and
performance of its operations.
Adjusted EBITDA is calculated by removing the
following income statement items:
- Foreign exchange loss (gain)
- Share based compensation
- Incremental costs in response to COVID-19 pandemic
Adjusted net income attributable to
owners of the Company and Adjusted net income per share
attributable to owners of the Company
The Company uses the financial measure “Adjusted
net income attributable to owners of the Company” and “Adjusted net
income per share attributable to owners of the Company” to
supplement information in its consolidated financial statements.
The Company believes that, in addition to conventional measures
prepared in accordance with IFRS, the Company and certain investors
and analysts use this information to evaluate the Company’s
performance. The Company excludes non-cash and unusual items from
net earnings to provide a measure which allows the Company and
investors to evaluate the operating results of the underlying core
operations.
During the period, the following non-cash or
unusual adjustments to calculated adjusted net income (loss):
- Share based compensation
- Unrealized foreign exchange loss (gain) on USD denominated debt
in MCSA
- Unrealized loss (gain) on foreign exchange derivative
contracts, net of tax
- Incremental costs in response to COVID-19 pandemic
- Unrealized loss (gain) on interest rate derivative
contracts
Net Debt
Net debt is determined based on cash and cash
equivalents, restricted cash and loans and borrowings as reported
in the Company’s consolidated financial statements. The Company
uses net debt as a measure of the Company’s ability to pay down its
debt.
Working capital
Working capital is determined based on current
assets and current liabilities as reported in the Company’s
consolidated financial statements. The Company uses working capital
as a measure of the Company’s short-term financial health and
operating efficiency.
ABOUT ERO COPPER CORP
Ero Copper Corp, headquartered in Vancouver,
B.C., is focused on copper production growth from the MCSA Mining
Complex located in Bahia State, Brazil, with over 40 years of
operating history in the region. The Company's primary asset is a
99.6% interest in the Brazilian copper mining company, MCSA, 100%
owner of the MCSA Mining Complex, which is comprised of operations
located in the Curaçá Valley, Bahia State, Brazil, wherein the
Company currently mines copper ore from the Pilar and Vermelhos
underground mines, and the Boa Esperança development project, an
IOCG-type copper project located in Pará, Brazil. The Company also
owns 97.6% of the NX Gold Mine, an operating gold and silver mine
located in Mato Grosso, Brazil. Additional information on the
Company and its operations, including technical reports on the MCSA
Mining Complex, Boa Esperança and NX Gold properties, can be found
on the Company's website (www.erocopper.com) and on SEDAR
(www.sedar.com).
ERO COPPER CORP. |
|
|
|
Signed: “David Strang” |
For further information contact: |
|
|
David Strang, CEO |
Courtney Lynn, VP, Corporate Development & Investor
Relations |
|
(604) 335-7504 |
|
info@erocopper.com |
|
|
CAUTION REGARDING FORWARD LOOKING INFORMATION
AND STATEMENTS This press release contains “forward-looking
information” within the meaning of applicable Canadian securities
laws. Forward-looking information includes statements that use
forward-looking terminology such as “may”, “could”, “would”,
“will”, “should”, “intend”, “target”, “plan”, “expect”, “budget”,
“estimate”, “forecast”, “schedule”, “anticipate”, “believe”,
“continue”, “potential”, “view” or the negative or grammatical
variation thereof or other variations thereof or comparable
terminology. Such forward-looking information includes, without
limitation, statements with respect to the Company’s expectations,
strategies and plans for the MCSA Mining Complex, the NX Gold
Property and the Boa Esperança Property, including the Company’s
planned exploration, development and production activities; the
significance and timing of any particular exploration program or
result and the Company’s expectations for current and future
exploration plans including, but not limited to, planned areas of
additional exploration, the significance of any drill results or
new discoveries and targets, including without limitation,
extensions of defined mineralized zones, possibilities for mine
life extensions or continuity of high-grade mineralization, further
extensions and expansion of mineralization near the Company’s
existing operations and throughout the Curaçá Valley or the NX Gold
Mine, statements with respect to the importance of any new
discoveries including newly identified mineral systems, the
significance of re-evaluation of the Company’s past producing open
pit mines, the timing and advancement of ongoing projects including
the Deepening Extension Project and the re-start of the Surubim
open pit mine; estimated completion dates for certain milestones;
the significance of any potential optimization initiatives in
connection with the Boa Esperança Property; the impact of the
COVID-19 pandemic on the Company’s planned drill programs; the
timing and amount of future production at the MCSA Mining Complex
and the NX Gold Property; the Company's ability to service its
ongoing obligations; the Company's future production outlook, cash
costs, capital resources, expenditures, and current global
macroeconomic uncertainty stemming from the COVID-19 pandemic and
its impact on the Company’s business, financial condition, results
of operations, cash flows and prospects.
Forward-looking information is not a guarantee
of future performance and is based upon a number of estimates and
assumptions of management in light of management’s experience and
perception of trends, current conditions and expected developments,
as well as other factors that management believes to be relevant
and reasonable in the circumstances, as of the date of this Press
Release including, without limitation, assumptions about:
favourable equity and debt capital markets; the ability to raise
any necessary additional capital on reasonable terms to advance the
production, development and exploration of the Company’s properties
and assets; future prices of copper and other metal prices; the
timing and results of exploration and drilling programs; the
accuracy of any mineral reserve and mineral resource estimates; the
geology of the MCSA Mining Complex, NX Gold Mine and the Boa
Esperança Property being as described in the technical reports for
these properties; production costs; the accuracy of budgeted
exploration and development costs and expenditures; the price of
other commodities such as fuel; future currency exchange rates and
interest rates; operating conditions being favourable such that the
Company is able to operate in a safe, efficient and effective
manner; work force continues to remain healthy in the face of
prevailing epidemics, pandemics or other health risks, political
and regulatory stability; the receipt of governmental, regulatory
and third party approvals, licenses and permits on favourable
terms; obtaining required renewals for existing approvals, licenses
and permits on favourable terms; requirements under applicable
laws; sustained labour stability; stability in financial and
capital goods markets; availability of equipment and critical
supplies, spare parts and consumables; positive relations with
local groups and the Company’s ability to meet its obligations
under its agreements with such groups; and satisfying the terms and
conditions of the Company’s current loan arrangements. While the
Company considers these assumptions to be reasonable, the
assumptions are inherently subject to significant business, social,
economic, political, regulatory, competitive and other risks and
uncertainties, contingencies and other factors that could cause
actual actions, events, conditions, results, performance or
achievements to be materially different from those projected in the
forward-looking information. Many assumptions are based on factors
and events that are not within the control of the Company and there
is no assurance they will prove to be correct.
Furthermore, such forward-looking information
involves a variety of known and unknown risks, uncertainties and
other factors which may cause the actual plans, intentions,
activities, results, performance or achievements of the Company to
be materially different from any future plans, intentions,
activities, results, performance or achievements expressed or
implied by such forward-looking information. Such risks include,
without limitation the risk factors listed under the heading “Risk
Factors” in the AIF.
Although the Company has attempted to identify
important factors that could cause actual actions, events,
conditions, results, performance or achievements to differ
materially from those described in forward-looking information,
there may be other factors that cause actions, events, conditions,
results, performance or achievements to differ from those
anticipated, estimated or intended.
The Company cautions that the foregoing lists of
important assumptions and factors are not exhaustive. Other events
or circumstances could cause actual results to differ materially
from those estimated or projected and expressed in, or implied by,
the forward-looking information contained herein. There can be no
assurance that forward-looking information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information. Accordingly,
readers should not place undue reliance on forward-looking
information.
Forward-looking information contained herein is
made as of the date of this press release and the Company disclaims
any obligation to update or revise any forward-looking information,
whether as a result of new information, future events or results or
otherwise, except as and to the extent required by applicable
securities laws.
Cautionary Notes Regarding Mineral Resource and
Reserve Estimates In accordance with applicable Canadian securities
regulatory requirements, all mineral reserve and mineral resource
estimates of the Company disclosed or incorporated by reference in
this press release have been prepared in accordance with NI 43-101
and are classified in accordance with the CIM Standards.
Mineral resources which are not mineral reserves
do not have demonstrated economic viability. Pursuant to the CIM
Standards, mineral resources have a higher degree of uncertainty
than mineral reserves as to their existence as well as their
economic and legal feasibility. Inferred mineral resources, when
compared with Measured or Indicated mineral resources, have the
least certainty as to their existence, and it cannot be assumed
that all or any part of an Inferred mineral resource will be
upgraded to an Indicated or Measured mineral resource as a result
of continued exploration. Pursuant to NI 43-101, Inferred mineral
resources may not form the basis of any economic analysis.
Accordingly, readers are cautioned not to assume that all or any
part of a mineral resource exists, will ever be converted into a
mineral reserve, or is or will ever be economically or legally
mineable or recovered.
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