VANCOUVER, BC, Nov. 15, 2021 /CNW/ - Josemaria Resources
Inc. (TSX: JOSE) (OMX: JOSE) (OTCQB: JOSMF) ("Josemaria
Resources" or the "Company"), is pleased to announce its results
for the three and nine months ended September 30, 2021. View PDF
Adam Lundin, Josemaria Resources'
Chief Executive Officer, comments: "We continue to push the
Josemaria Project forward on all fronts. Basic Engineering has
commenced and is ongoing, and preparations are in place, with the
expansion of our exploration camp facilities, to commence a
multi-faceted 65,000-metre drill program during the fourth quarter.
We are successfully recruiting personnel with considerable
experience in constructing and commissioning large scale mines.
Active engagement continues with federal and San Juan provincial
authorities in Argentina,
including discussions aimed at finalizing and securing commercial
and fiscal terms applicable to the project and ESIA approval. We
continue to progress the Josemaria Project as we believe copper is
the key to a low carbon future, and a new supply of responsibly
mined copper is critical as the world shifts to clean energy and
new technologies. Current commodity prices support our view of a
tightening copper market, where there are a limited number of
readily developable projects due to under investment in the sector
over the last decade."
THIRD QUARTER 2021 HIGHLIGHTS
- The Company continues to advance toward sanctioning
construction of the Josemaria Project. Highlights during 2021
include:
-
- Project Engineering has made significant advancements to
de-risk and optimize the process flowsheet with improvements in the
crushing/conveying, grinding and flotation circuits and tailings
facilities. An area of significant progress is the grinding
circuit, where the size of the SAG mills has been reduced from 42
to 40 feet in diameter, achieved through the implementation of a
2-stage pebble crushing circuit while maintaining the 150
kilo-tonnes per day design throughput. The Project has commenced
Basic Engineering with the goal of completion during the first half
of 2022;
- The Company is actively preparing to execute a 65,000-metre
drill program aimed primarily at providing development/infill
geo-metallurgical data and acquiring additional site geotechnical
information for key Project infrastructure and detailed mine
planning. Life of mine hydrogeology and aquifer modelling will be
updated with additional water well and piezometer drilling. It is
anticipated that up to 8 rigs will be active at the peak of the
drilling program. Management has a high degree of confidence that
drilling will lead to an expansion of Indicated resources, and
potentially reserves, as Inferred material is better defined and
reclassified. At the Project site, camp expansion activities are
ahead of schedule, and drilling is expected to commence in Q4 2021.
Regional exploration program plans are being finalized to test
targets outside the current resource but adjacent to the
Project;
- Following the submission of the ESIA in February 2021, the Company continues to engage
with the San Juan authorities in their evaluation process;
- Offsite infrastructure including access road, electrical power,
and logistics studies are ongoing, aimed at finalizing plans for
integration into the design of the Project during Basic
Engineering; and
- The Company has continued to aggressively recruit the team that
will ultimately be responsible for constructing and commissioning
the Project, including Mr. Phil
Brumit who has been appointed to the role of Executive Vice
President Projects and Operation and Mr. Reece Fuller who has been appointed to the role
of Senior Vice President Projects. Mr. Brumit and Mr. Fuller both
have decades of international mining, engineering, construction and
senior leadership experience.
- During the third quarter 2021, the Company announced the
securing of two credit facilities, evidenced by debentures,
totaling US$20.0 million, one with
Lorito Holdings S.à.r.l. for US$10.0
million and one with Zebra Holdings and Investments S.à.r.l.
for US$10.0 million, each of which
has a term of 18 months ending March 7,
2023. The Company concurrently announced the extension of
the maturity dates of all previously announced debentures to
March 7, 2023.
- During the second quarter 2021, the Company successfully closed
a private placement of 58,708,900 common shares of the Company at a
price (the "Offering Price") of $0.69
per common share for gross proceeds of $40.5
million. Concurrently, the Company also closed a public
offering (the "Offering") pursuant to which a syndicate of
underwriters purchased, on a bought deal basis, 14,500,000 common
shares at the Offering Price for gross proceeds of $10.0 million, plus an over-allotment option at
the Offering Price of an additional 2,175,000 common shares for
gross proceeds of $1.5 million, for
total combined gross proceeds of $52.0
million. The Company incurred related share issuance costs
of $1.4 million for net proceeds of
$50.6 million.
FINANCIAL RESULTS
|
Three months
ended
September
30,
|
Nine months
ended
September
30,
|
(in thousands,
except per share amounts)
|
2021
|
2020
|
2021
|
2020
|
Exploration and project
investigation expenses
|
$
|
15,781
|
$
|
2,544
|
$
|
27,327
|
$
|
26,346
|
Additions of fixed
assets
|
|
14,268
|
|
121
|
|
14,276
|
|
125
|
General and
administration ("G&A")
|
|
1,752
|
|
1,116
|
|
6,232
|
|
4,061
|
Foreign exchange and
trading gains realized on equity investments
|
|
(8,053)
|
|
(657)
|
|
(4,990)
|
|
(657)
|
Net loss
|
|
10,374
|
|
2,693
|
|
25,446
|
|
27,971
|
Basic and diluted loss
per share
|
|
0.03
|
|
0.01
|
|
0.07
|
|
0.11
|
|
|
|
|
|
|
|
|
|
The Company's net loss for the three and nine months ended
September 30, 2021 was $10.4 million and $25.4
million, respectively, compared to $2.7 million and $28.0
million, respectively, for the same periods in 2020. The
increase in net loss for the three months ended September 30, 2021 as compared to the same period
in 2020 mainly reflects the Company having conducted an increased
level of engineering, environmental and other key studies focused
on furthering the Josemaria Project towards development. The net
loss for the nine months ended September 30,
2021 is slightly lower than the net loss for the same period
in 2020 as the Company had conducted a field program during Q4 2019
into Q1 2020 which included reserve definition drilling and
advanced ongoing environmental studies in support of the
Feasibility Study for the Josemaria Project, which was published in
October 2020.
Exploration and project investigation expenses of $15.8 million and $27.3
million were incurred during the three and nine months ended
September 30, 2021, as compared to
$2.5 million and $26.3 million incurred during the comparative
periods, respectively, in 2020. During the nine months ended
September 30, 2021, the Company's
primary exploration and project investigation expenses consisted of
engineering and optimization studies, expenditures associated with
supporting the ongoing ESIA approval process in Argentina, commercial and fiscal studies and
negotiations, environmental baseline studies, roadwork and related
studies, and community relations.
G&A costs for the three and nine months ended September 30, 2021 totaled $1.8 million and $6.2
million, respectively, compared to $1.1 million and $4.1
million, respectively, over the same periods in 2020. The
increase was mainly the result of higher salaries and benefits due
to voluntary salary reductions for the senior management group not
being in place during the comparative 2021 period and higher
discretionary management bonuses, and higher share-based
compensation expenses due to a larger number of options having been
granted as recruitment of personnel has increased. Share-based
compensation is a non-cash charge reflecting the expense associated
with the vesting of outstanding stock options during the
period.
During the three and nine months ended September 30, 2021, the Company added
$14.3 million of fixed assets related
to the planned field season commencing in Q4 2021 (no such
additions in the prior comparative periods). The fixed assets
consist of modular buildings that will house the field and
administrative teams carrying out field activities and the drill
program.
From time to time, as part of the capital funding process from
the Canadian parent to the Argentinian subsidiary, the Company will
purchase equity instruments via a third-party investment broker.
The equity instruments are transferred from the parent to the
subsidiary and held for a pre-determined period, typically five
business days, and then sold. The Company conducts such
transactions on an intra-period basis and does not hold the equity
instruments at period end. For the three months ended September 30, 2021, the Company realized a
trading loss of $1,441,065 (2020 –
$679,619) and a foreign exchange gain
of $9,511,348 (2020 – $1,265,499) as a result of holding the equity
instruments for a net realized gain of $8,070,283 (2020 – $585,880). For the three months ended
September 30, 2021, the Company also
incurred an unrealized loss on available for sale equity
investments of $17,307 (2020 – gain
of $70,859). During the nine months
ended September 30, 2021, the Company
realized a trading loss of $1.8
million (2020 – $1.6 million)
and a foreign exchange gain of $11.6
million (2020 – $6.7 million)
as a result of holding the equity instruments for a net realized
gain of $9.8 million (2020 –
$4.9 million). The increase in net
gain is the result of the Company having conducted an increased
quantum of such transactions during Q3 2021 than in the comparative
period as a result of funding increased in-country activity in
Argentina.
During the nine months ended September
30, 2021, the Company recognized a net monetary loss of
$0.4 million (2020 – $0.3 million) in relation to the application of
hyper-inflationary accounting for the Company's Argentinian
subsidiary, which began July 1, 2018.
In other comprehensive loss, the Company recognized a gain of
$2.5 million resulting from the
impact of hyper-inflation which consists of adjustments recognized
on the continuing inflation of opening non-monetary balances during
the nine months ended September 30,
2021 (2020 – $1.8 million) and
the ongoing translation of the Company's Argentinian subsidiary
into the Canadian dollar presentation currency following
July 1, 2018, as mentioned above. A
detailed discussion regarding the application of hyper-inflationary
accounting has been provided in Note 3 to the condensed interim
consolidated financial statements.
SELECTED FINANCIAL INFORMATION
(in
thousands)
|
|
|
September
30,
|
December
31,
|
2021
|
2020
|
Cash
|
|
|
$
|
11,022
|
$
|
6,741
|
Working capital
deficit
|
|
|
|
(85)
|
|
(24,748)
|
Mineral
properties
|
|
|
|
11,721
|
|
10,065
|
Total
assets
|
|
|
|
41,533
|
|
19,745
|
Total
liabilities
|
|
|
|
(22,173)
|
|
(32,101)
|
The Company does not currently generate income from operations.
The Company anticipates that it will need further funding in order
to advance the Josemaria Project, and for general corporate and
working capital purposes. Historically, capital requirements have
been funded through equity financing, joint ventures, disposition
of mineral properties and investments, and the use of credit
facilities with related parties. While management is confident that
additional sources of funding will be secured to fund planned
expenditures, factors that could affect the availability of
financing include the progress and results of ongoing exploration
and project investigation activities at the Josemaria Project, the
state of international debt and equity markets, investor
perceptions and expectations of the global copper, gold, and/or
silver markets, and the ongoing novel coronavirus pandemic
("COVID-19"). If necessary, the Company may explore opportunities
to revise the due dates of its liabilities, and/or settle its
liabilities through the issuance of common shares and other equity
instruments. Based on the amount of funding raised, the Company's
planned initiatives and other work programs may be postponed, or
otherwise revised, as necessary.
QUALIFIED PERSONS
The technical information in this press release has been
reviewed and approved by Mr. Bob
Carmichael, P. Eng. (BC), the Company's Vice President of
Exploration, and Mr. Dustin Smiley,
P. Eng. (BC), the Company's Engineering Manager. Both Mr.
Carmichael and Mr. Smiley are Qualified Persons under National
Instrument 43-101 Standards of Disclosure for Mineral Projects.
ABOUT JOSEMARIA
Josemaria Resources Inc. is a
natural resources company focused on developing its advanced stage,
100% owned Josemaria Copper-Gold Project in the San Juan Province
of Argentina. A recently published
Feasibility Study (see "NI 43-101 Technical Report, Feasibility
Study for the Josemaria Copper-Gold Project, San Juan Province,
Argentina" dated effective
September 28, 2020 and filed on
November 5, 2020) demonstrates a
simple and conventional open pit copper-gold project with robust
economics and a rapid payback period. Josemaria is a Lundin
Group company and works in partnership with the Lundin Foundation
to execute best practices in responsible mineral development in
Argentina where the Lundins have a
30-year track record of value creation. The Company is a reporting
issuer in all Provinces and its corporate head office is in
Vancouver, BC. The Company's
shares are listed on the TSX and on Nasdaq Stockholm under the
symbol "JOSE", and trade on the OTCQB under the symbol "JOSMF".
ADDITIONAL INFORMATION
This is information that the
Company is obliged to make public pursuant to the Swedish Financial
Instruments Trading Act. The information was submitted for
publication, through the agency of the contact person set out
below, on November 15, 2021
18:00 EST.
On behalf of the Board of Directors of Josemaria Resources,
Adam Lundin,
President and CEO
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TSX: JOSE | OTCQB: JOSMF | Nasdaq Stockholm: JOSE | WKN:
A2PN5S | ISIN: CA48086P1009
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This press release includes certain "forward-looking information"
and "forward-looking statements" (collectively "forward-looking
information") within the meaning of applicable securities
legislation. All statements, other than statements of historical
fact, included herein, including, without limitation, the Company's
plans and expectations regarding the Josemaria Project, future
price of copper, gold and silver; the results of the Feasibility
Study and expected timelines; the timing and amount of estimated
future production; net present values and internal rates of return
at the Josemaria Project; recovery rates; payback periods; costs of
production; capital expenditures; costs and timing of the
development of the Josemaria Project; mine life; the potential
future development of the Josemaria Project and the future
operating or financial performance of the Company; the impact of
COVID-19 on the Company's operations, hyper-inflationary
accounting, the effect of government regulations (or changes
thereto) with respect to restrictions on production, export
controls and duties, income taxes, royalties, expropriation of
property, repatriation of profits, environmental legislation, land
use, water use, mine safety, approval processes and the receipt of
necessary permits are forward-looking information.
Forward-looking information is frequently, but not always,
identified by words such as "expects", "anticipates", "believes",
"intends", "estimates", "potential", "possible", and similar
expressions, or statements that events, conditions, or results
"will", "may", "could", or "should" occur or be achieved. These
forward-looking statements may also include statements regarding
perceived merit of properties; exploration plans and budgets;
mineral reserves and resource estimates; work programs; capital
expenditures; timelines; strategic plans; market prices for
precious and base metals; or other statements that are not
statements of fact. In addition, statements relating to "mineral
resources" and "mineral reserves" are deemed to be forward-looking
information, as they involve the implied assessment, based on
certain estimates and assumptions that the mineral resources and
mineral reserves described can be profitably produced in the
future.
Forward-looking information involves various risks and
uncertainties. There can be no assurance that such information will
prove to be accurate, and actual results and future events could
differ materially from those anticipated in such information.
Important factors that could cause actual results to differ
materially from the Company's expectations include the Company's
ability to finance the development of its Josemaria Project;
commodity price fluctuations; assumptions and discount rates being
appropriately applied to the Feasibility Study, uncertainty as to
whether there will ever be production at the Company's Josemaria
Project and any other future mineral exploration and development
properties; risks related to the Company's ability to commence
production and generate revenues or obtain adequate financing for
its planned exploration and development activities; risks related
to lack of infrastructure including but not limited to the risk
whether or not the Josemaria Project will receive the requisite
permits and, if it does, whether the Company will build the
Josemaria Project; risks related to inclement weather which may
delay or hinder activities at the Company's mineral properties;
risks related to the Company's dependence on third parties for the
development of its projects; uncertainties relating to the
assumptions underlying resource and reserve estimates; mining and
development risks, including risks related to infrastructure,
accidents, equipment breakdowns, labor disputes, bad weather,
non-compliance with environmental and permit requirements or other
unanticipated difficulties with or interruptions in development,
construction or production; the geology, grade and continuity of
the Company's mineral deposits; the uncertainties involving success
of exploration, development and mining activities; permitting
timelines; risks pertaining to the outbreak of the global
pandemics, including COVID-19; government regulation of mining
operations; environmental risks; unanticipated reclamation
expenses; prices for energy inputs, labour, materials, supplies and
services; uncertainties involved in the interpretation of drilling
results and geological tests and the estimation of mineral reserves
and mineral resources; the need for cooperation of government
agencies and indigenous groups in the development and operation of
properties including the Josemaria Project; unanticipated variation
in geological structures, metal grades or recovery rates;
fluctuations in currency exchange rates; unexpected cost increases
in estimated capital and operating costs; the need to obtain
permits and government approvals; uncertainty related to title to
the Company's mineral properties, anticipated use of proceeds from
financings, the ability of the Company to satisfy the conditions of
the terms and conditions of the debentures issued pursuant credit
facilities, including repayment thereof upon their respective
maturity dates and the issuance of Common Shares thereunder and
other risks and uncertainties disclosed in the Company's periodic
filings with Canadian securities regulators and in other Company
reports and documents filed with applicable securities regulatory
authorities from time to time, including the Company's Annual
Information Form available under the Company's profile at
www.sedar.com. In addition, these statements involve
assumptions made with regards to the Company's ability to develop
the Josemaria Project and to achieve the results outlined in the
Feasibility Study; the ability to raise the capital required to
fund construction and development of the Josemaria Project; and the
results and impact of future exploration at the Josemaria Project.
The Company's forward-looking information reflects the beliefs,
opinions, and projections on the date the statements are made. The
Company assumes no obligation to update the forward-looking
information or beliefs, opinions, projections, or other factors,
should they change, except as required by law.
SOURCE Josemaria Resources Inc.