VANCOUVER, May 10, 2018 /CNW/ - Filo Mining
Corporation (TSX-V:FIL) (Nasdaq First North:FIL) ("Filo Mining"
or the "Company") is pleased to announce its results for three
months ended March 31, 2018.
HIGHLIGHTS
Building on a strong 2017, which culminated in the completion of
a preliminary economic assessment ("PEA") on the Filo del Sol
Project in November 2017, the Company
continued its forward momentum into Q1 2018 with the undertaking
and completion of an extensive 2017/2018 field program, which was
designed to support a Preliminary Feasibility Study ("PFS"). The
PFS will explore various opportunities to enhance the value at the
flagship Filo del Sol Project for the Company's shareholders, as
identified in the PEA, which includes analysis of lower capital
cost processing options and optimization of mine planning and
scheduling. Ausenco Engineering Canada Inc. has been engaged to
lead the PFS, which is expected to be completed by the first
quarter of 2019.
During the 2017/2018 field program, sample material in excess of
4.5 tonnes was collected for metallurgical, geotechnical, and
environmental testwork in support of the PFS. In addition, 9,411
metres of drilling in 31 reverse circulation ("RC") and 9 diamond
drill holes were also completed, the results of which will be used
as the basis for an update to the Mineral Resource estimate,
scheduled for the third quarter, 2018. The main goals of the drill
program included conversion of Inferred oxide material to the
Indicated category, while also extending mineralization beyond the
current limits of the Mineral Resource, both of which are expected
to be achieved based on the first batch of assay results received
to date. Highlights from these initial assay results, which cover
20 RC holes, include the following:
- VRC135: 20 metres @ 0.54% Cu, 0.96 g/t Au, 208.0 g/t Ag;
- VRC137: 164 metres @ 0.33% Cu, 0.36 g/t Au, 27.4 g/t Ag;
- VRC143: 36 metres @ 1.45% Cu, 0.34 g/t Au, 0.9 g/t Ag;
- VRC152: 38 metres @ 0.33% Cu, 0.28 g/t Au, 313.6 g/t Ag;
- VRC153: 12 metres @ 0.86% Cu, 1.91 g/t Au, 0.8 g/t Ag; and
- VRC155: 50 metres @ 0.56% Cu, 0.50 g/t Au, 236.4 g/t Ag.
The remaining lab assays are expected to be available towards
the end of the second quarter of 2018.
Lastly, the Company successfully replenished its treasury during
the first quarter, which provides more than adequate financial
resources to complete the PFS currently underway. In February 2018, the Company successfully raised
gross proceeds of $25.5 million
pursuant to a bought deal offering of common shares and a
concurrent non-brokered private placement (the "Financings"), which
resulted in the sale of 9,823,195 common shares of the Company at a
price of $2.60 per common share (the
"Issue Price"). The Issue Price was undiscounted relative to the
trading price of the Company's common shares on the TSX-V on
February 5, 2018, the date of
announcing and launching the Financings.
Adam Lundin, President and CEO,
commented, "Filo Mining has had a strong start to 2018, having now
strengthened its balance sheet with $25.5
million from the tandem equity raise, and having completed
an ambitious 2017/2018 field program, which will provide critical
support to various PFS disciplines and allow for an update to the
Mineral Resource estimate at the Filo del Sol Project. We are
pushing full steam ahead and building on the momentum carried
forward from the prior year, as we will look not only towards the
completion of a PFS by Q1 2019, but rather start looking beyond
this horizon as the Project begins to take shape."
OUTLOOK
The Company is currently awaiting the assay results from the
final 11 RC and 9 diamond drill holes of the 2017/2018 drill
program, which are expected to become available before the end of
the second quarter. The results of the 2017/2018 drill program,
once received in full, will form the basis for an update to the
Mineral Resource estimate on the Filo del Sol Project, which is
currently planned for completion during the third quarter. Based on
results received to date, the Company anticipates that it will be
able to successfully convert a portion of the Inferred material to
the Indicated category, while also extending mineralization beyond
the current limits of the Mineral Resource.
The updated Mineral Resource estimate, together with the results
of the other data collection and testwork disciplines undertaken
during the 2017/2018 field program, will be incorporated into a PFS
of the Filo del Sol Project, which is targeted for completion by
the first quarter of 2019. The PFS will explore several
opportunities identified in the PEA for unlocking value at the Filo
del Sol Project, including:
- Evaluating unique processing methods to take advantage of the
fast leach kinetics noted in metallurgical testwork completed to
date, which could reduce project capital by recovering soluble
copper through installing a conventional washing system for process
feed after the crushing circuit. Further study of this option is
planned and, if successful, the washing stage could eliminate the
permanent copper and on/off leach pads and their associated
materials handling systems, saving on capital and operating costs
associated with these installations;
- Evaluating opportunities to optmize the mine plan and
production schedules by smoothing out the production profile and
bringing forward copper revenues; and
- Increasing metallurgical recoveries with further test work and
optimization.
The analysis of alternative processing options and refinement of
metallurgical recoveries is currently underway, using material
collected during the 2017/2018 field program from diamond drill
holes and surface trenches. The results of this current phase of
metallurgical testwork are expected to be available in the third
quarter of 2018.
With the recently completed PEA and a PFS currently underway on
the Filo del Sol Project, together with a treasury of $18.1 million at March 31,
2018, the Company is well positioned to make strides towards
advancing the Filo del Sol Project. The results of the PFS will
guide the direction taken by the Company with respect to the Filo
del Sol Project and may lead to further advanced studies of the
Project.
FINANCIAL
RESULTS
|
|
|
|
|
|
(In thousands of
Canadian dollars, except per share amounts)
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
|
|
March
31,
|
|
March
31,
|
|
|
|
2018
|
|
2017
|
Exploration and
project investigation
|
|
|
13,132
|
|
8,930
|
General and
administration ("G&A")
|
|
|
1,494
|
|
635
|
Net loss
|
|
|
14,389
|
|
9,513
|
Basic and diluted
loss per share
|
|
|
0.22
|
|
0.15
|
The financial
information in this table were selected from the Company's
condensed interim consolidated financial statements for the three
months ended March 31, 2018 (the "Financial Statements"), which are
available on SEDAR at www.sedar.com and the Company's website
www.filo-mining.com.
|
SELECTED FINANCIAL
INFORMATION
|
|
|
|
|
|
|
(In thousands of
Canadian dollars)
|
|
|
March
31,
|
|
December
31,
|
|
|
2018
|
|
2017
|
Cash
|
|
18,082
|
|
2,417
|
Working
capital
|
|
12,039
|
|
1,462
|
Mineral
properties
|
|
6,598
|
|
6,479
|
Total
assets
|
|
26,292
|
|
10,193
|
The financial
information in this table were selected from the Financial
Statements, which are available on SEDAR at www.sedar.com and
the Company's website www.filo-mining.com.
|
The Company incurred a net loss of $14.4
million during the three months ended March 31, 2018, comprised of $13.1 million and $1.5
million in exploration and project investigation costs and
G&A costs, respectively, compared to a net loss of $9.5 million for the three months ended
March 31, 2017. The variance is
primarily due to relative levels of exploration activity undertaken
during the respective periods. Specifically, the larger net loss in
the first quarter of 2018 is due to the execution of a larger
exploration program during the 2017/2018 exploration season to
generate and collect data in support of the PFS currently underway
on the Filo del Sol Project.
LIQUIDITY AND CAPITAL RESOURCES
As at March 31 2018, the Company
had cash of $18.1 million and net
working capital of $12.0 million,
compared to cash of $2.4 million and
net working capital of $1.5 million,
as at December 31, 2017. The increase
in the Company's cash and net working capital is due primarily to
aggregate net proceeds totaling $24.4
million received from the Financings, which closed on
February 28, 2018. This cash inflow
has been partially offset by funds directed towards advancing the
Filo del Sol Project, and to a lesser extent, funds spent for
general corporate purposes and repayment of all amounts owed
pursuant to a short-term credit facility as announced by the
Company on January 12, 2018.
Moving forward, the Company expects that the majority of its
treasury will be used to fund ongoing work programs to advance the
Filo del Sol Project.
About Filo Mining
Filo Mining is a Canadian mineral exploration company which
holds a 100% interest in the Filo del Sol Project on the border of
Argentina's San Juan Province and
Chile's adjacent Region III. Filo
del Sol is located between the prolific Maricunga and El Indio Gold
Belts, two major mineralized trends that contain such deposits as
Caspiche, La Coipa, Veladero, and El Indio. The region is
mining-friendly and hosts a number of large-scale mining
operations. The project area is covered under the Mining
Integration and Complementation Treaty between Chile and Argentina, which provides the framework for
the development of cross border mining projects. Built on a
foundation of experienced management and focused on advancing
exploration projects in Chile and
Argentina, Filo Mining is well
positioned to build shareholder value through discovery and
resource development.
Additional information
The Filo del Sol Project, the Mineral Resource estimate, and the
PEA are described in a Technical Report titled "Independent
Technical Report for a Preliminary Economic Assessment on the Filo
del Sol Project, Region III, Chile
and San Juan Province, Argentina"
dated December 18, 2017, with an
effective date of November 6, 2017
(the "Technical Report"), which was prepared for Filo Mining by SRK
Consulting (Canada) Inc ("SRK").
The Qualified Persons, as defined under NI 43-101, responsible for
the Technical Report are Fionnuala
Devine, P. Geo., Merlin Geosciences Inc., Carl E. Defilippi, RM SME, Kappes, Cassiday
& Associates, Giovanni Di
Prisco, PhD., P.Geo., Terra Mineralogical Services Inc.,
James N. Gray, P. Geo., Advantage
Geoservices Limited, Robert
McCarthy, P. Eng., SRK, Cameron
Scott, P. Eng., SRK, and Neil
Winkelmann, FAusIMM, SRK, all of whom are independent of
Filo Mining. The Technical Report is available for review under the
Company's profile on SEDAR at www.sedar.com and on the Company's
website at www.filo-mining.com.
The Company's condensed interim consolidated financial
statements for the three months ended March
31, 2018 and related management's discussion and analysis
are available on the Company's website at www.filo-mining.com or
under its profile on SEDAR at www.sedar.com.
Filo Mining is listed on the TSX-V and Nasdaq First North
Exchange under the trading symbol "FIL". Pareto Securities AB is
the Company's Certified Adviser on Nasdaq First North.
This information was submitted by Filo Mining Corp. for
publication, through the agency of the contact person set out
below, on May 10, 2018 at 5:00
pm Pacific time.
On behalf of the board of directors of Filo Mining,
Adam Lundin, President and
CEO
Filo Mining Corp.
Cautionary Note Regarding Forward-Looking Statements
Certain statements made and information contained herein in this
press release constitutes "forward-looking information" and
forward-looking statements" within the meaning of applicable
securities legislation (collectively, "forward-looking information"
or "forward-looking statements") concerning the business,
operations, financial performance and condition of Filo
Mining. The forward-looking information contained in this
press release is based on information available to the Company as
of the date of this press release. Except as required under
applicable securities legislation, the Company does not intend, and
does not assume any obligation, to update this forward-looking
information. Generally, any statements that express or
involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future
events or performance, (often, but not always, identified by words
or phrases such as "plans", "expects" or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "projects" , "estimates", "budgets", "scheduled",
"forecasts", "assumes", "intends", "strategy", "goals",
"objectives", "potential", "possible", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or statements that certain actions, events, conditions or results
"will", "may", "could", "would", "should", "might" or "will be
taken", "will occur" or "will be achieved" or the negative
connotations thereof and similar expressions) are not statements of
historical fact and may be forward-looking statements.
All statements other than statements of historical fact may be
forward-looking statements. Forward-looking information is
necessarily based on estimates and assumptions that are inherently
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance
or achievements of the Company to be materially different from
those expressed or implied by such forward-looking information,
including but not limited to: risks and uncertainties relating to,
among other things, the inherent uncertainties regarding mineral
resource estimates, cost estimates, changes in commodity prices,
currency fluctuation, financings, unanticipated resource grades,
infrastructure, results of exploration activities, cost overruns,
availability of materials and equipment, timeliness of government
approvals, taxation, political risk and related economic risk and
unanticipated environmental impact on operations as well as other
risks, and uncertainties and other factors, including, without
limitation, those referred to in the "Risks and Uncertainties"
section of the Company's most recent MD&A and/or Annual
Information Form, under the heading "Risks Factors", and elsewhere,
which may cause the actual results, level of activity, performance
or achievements of the Company to be materially different from
those expressed or implied by such forward-looking information.
The Company believes that the expectations reflected in the
forward-looking statements and information included in this press
release are reasonable but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements and information should not be unduly relied upon.
This statement and information is as of the date of the press
release. In particular, this press release contains
forward-looking statements or information pertaining to the
assumptions used in the PEA for the Filo del Sol project, the
assumptions used in the mineral resources estimates for the Filo
del Sol project, including, but not limited to, geological
interpretation, grades, metal price assumptions, metallurgical and
mining recovery rates, geotechnical and hydrogeological conditions,
as applicable; ability to develop infrastructure; assumptions made
in the interpretation of drill results, geology, grade and
continuity of mineral deposits; expectations regarding access and
demand for equipment, skilled labour and services needed for
exploration and development of mineral properties; and that
activities will not be adversely disrupted or impeded by
exploration, development, operating, regulatory, political,
community, economic and/or environmental risks. In addition,
this press release contains forward-looking statements or
information pertaining to the anticipated undertaking of and
timing for the completion of a Pre-Feasibility Study; expected
timing for an updated mineral resource estimate and the results of
metallurgical testwork; expected timing or ability to secure
additional financing and/or the quantum and terms thereof;
exploration and development plans and expenditures; the timing and
nature of studies and any potential development scenarios;
opportunities to improve project economics; the success of future
exploration activities; potential for resource expansion; potential
for the discovery of new mineral deposits; ability to build
shareholder value; expectations with regard to adding to mineral
resources through exploration; expectations with respect to the
conversion of inferred resources to an indicated resources
classification; ability to execute the Planned Work programs;
estimation of commodity prices, mineral resources, costs, and
permitting time lines; ability to obtain surface rights and
property interests; currency exchange rate fluctuations;
requirements for additional capital; government regulation of
mining activities; environmental risks; unanticipated reclamation
expenses; title disputes or claims; limitations on insurance
coverage; and other risks and uncertainties.
Forward-looking information is based on certain assumptions that
the Company believes are reasonable, including that the current
price of and demand for commodities will be sustained or will
improve, the supply of commodities will remain stable, that the
general business and economic conditions will not change in a
material adverse manner, that financing will be available if and
when needed on reasonable terms and that the Company will not
experience any material labour dispute, accident, or failure of
plant or equipment. These factors are not, and should not be
construed as being, exhaustive. Although the Company has
attempted to identify important factors that would cause actual
results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated, or intended.
There can be no assurance that such statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. All of
the forward-looking information contained in this document is
qualified by these cautionary statements. Readers are
cautioned not to place undue reliance on forward-looking
information due to the inherent uncertainty thereof.
Statements relating to "mineral resources" are deemed to be
forward looking information, as they involve the implied
assessment, based on certain estimates and assumptions, that the
mineral resources described can be profitably produced in the
future.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release
SOURCE Filo Mining Corp.