VANCOUVER, Aug. 9, 2018 /CNW/ - Filo Mining Corp.
(TSX-V:FIL)(Nasdaq First North:FIL) ("Filo Mining" or the
"Company") is pleased to announce its results for three and six
months ended June 30, 2018.
Please view PDF version of news release
HIGHLIGHTS
Following the completion of an extensive 2017/2018 field program
at its flagship Filo del Sol Project, the Company's key objective
during the second quarter of 2018 was the advancement of samples
collected through testing and analysis. The field program included
9,411 metres of mixed reverse circulation ("RC") and diamond
drilling, and was designed to support the undertaking of a
Preliminary Feasibility Study ("PFS"). Based on the complete assay
results from the 2017/2018 drill program, the Company successfully
updated the Mineral Resource estimate at the Filo del Sol Project,
with an effective date of June 11,
2018 (see news release dated August
8, 2018). The Mineral Resource estimate confirms successful
achievement by the Company of one of the key objectives of the most
recent field program, which was to increase the tonnage and
contained metal within the Indicated Mineral Resource.
Specifically, this Mineral Resource update successfully
increased:
- The total Indicated resource tonnes by 14% to 425.1 million
tonnes;
- The total Indicated contained gold in all zones by 12% to 4.4
million ounces;
- The total Indicated contained copper in all zones by 12% to 3.1
billion pounds; and
- The total Indicated contained silver in all zones by 34% to 147
million ounces.
This resource update is comprised of four distinct mineral
zones: an uppermost gold oxide ("AuOx") zone, a copper-god oxide
("CuAuOx") zone, and a silver zone, all of which is underlain by a
copper-gold sulphide ("Sulphide") zone. The updated Mineral
Resource estimate, segregated by zone, is summarized in the
following table.
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Zone
|
Cutoff
|
Category
|
Tonnes
(millions)
|
Cu
(%)
|
Au
(g/t)
|
Ag
(g/t)
|
lbs Cu
(millions)
|
Ounces Au
(thousands)
|
Ounces Ag
(thousands)
|
AuOx
|
0.20 g/t
Au
|
Indicated
|
49.9
|
0.04
|
0.42
|
3.0
|
45
|
679
|
4,810
|
Inferred
|
20.8
|
0.08
|
0.34
|
2.4
|
35
|
226
|
1,580
|
CuAuOx
|
0.15 %
CuEq
|
Indicated
|
259.2
|
0.38
|
0.29
|
2.7
|
2,166
|
2,385
|
22,500
|
Inferred
|
74.3
|
0.29
|
0.31
|
2.1
|
481
|
735
|
5,040
|
Ag
|
20 g/t Ag
|
Indicated
|
40.5
|
0.50
|
0.43
|
87.6
|
446
|
562
|
114,180
|
Inferred
|
8.8
|
0.36
|
0.43
|
79.3
|
70
|
121
|
22,400
|
Sulphide
|
0.30 %
CuEq
|
Indicated
|
75.5
|
0.27
|
0.34
|
2.2
|
451
|
813
|
5,370
|
Inferred
|
71.2
|
0.30
|
0.33
|
2.5
|
470
|
750
|
5,740
|
Total
|
Indicated
Inferred
|
425.1
|
0.33
|
0.32
|
10.7
|
3,108
|
4,439
|
146,860
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175.1
|
0.27
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0.33
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6.2
|
1,056
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1,832
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34,760
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1
– CuAuOx copper equivalent (CuEq) assumes metallurgical
recoveries of 82% for copper, 55% for gold and 71% for silver based
on preliminary metallurgical testwork, and metal prices of US$3/lb
copper, US$1300/oz gold, US$20/oz silver. The CuEq formula
is: CuEq=Cu+Ag*0.0084+Au*0.4239;
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2
– Sulphide copper equivalent (CuEq) assumes metallurgical
recoveries of 84% for copper, 70% for gold and 77% for silver based
on similar deposits, as no metallurgical testwork has been done the
Sulphide mineralization, and metal prices of US$3/lb copper,
US$1300/oz gold, US$20/oz silver. The CuEq formula is:
CuEq=Cu+Ag*0.0089+Au*0.5266;
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3
– The Qualified Person for the resource estimate is James N.
Gray, P.Geo. of Advantage Geoservices Ltd.;
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4
– All figures are rounded to reflect the relative accuracy of
the estimate;
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5
– Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability;
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6
– The resource was constrained by a Whittle® pit
shell using the following parameters: Cu $3/lb, Ag $20/oz, Au
$1300/oz, slope of 45°, a mining cost of $2.50/t and an average
process cost of $13.26/t.
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The updated Mineral Resource estimate will be incorporated into
the PFS currently underway, which is being led by Ausenco
Engineering Canada Inc. and targeted for completion by the first
quarter of 2019. Metallurgical testwork results will be the next
integral input to the PFS. This next phase of metallurgical
testwork, which commenced in early April
2018 and is based on samples collected during 2017/2018
diamond drilling and surface trenching, is expected to be completed
in the third quarter of 2018.
Reflecting on the Company's second quarter progress,
Adam Lundin, President and CEO,
commented, "Filo Mining has pushed forward as planned with the
recent update to the Mineral Resource estimate for the Filo del Sol
Project and kicking off the next phase of metallurgical testwork,
all of which will support the PFS that is currently underway and
planned for completion by Q1 2019. The update to the Mineral
Resource not only demonstrates that our team was successful in
obtaining another key PFS input, but also demonstrates the strength
of the deposit at the Filo del Sol Project. The update to the
Mineral Resource estimate resulted in a notable increase in both
Indicated tonnage and contained metal, while the Project has
maintained its considerable exploration potential with less than
20% of the project area explored to date and the resource remaining
open for expansion in several directions and at depth. The Company
is looking forward to the completion of the metallurgical testwork
program, which the November 2017
preliminary economic assessment had identified as having potential
to create value at the Filo del Sol Project."
OUTLOOK
The Company's main focus for the remainder of 2018 will be the
completion of the PFS, targeted for completion by the first quarter
of 2019. The PFS will incorporate the updated Mineral Resources
estimate and will explore several opportunities identified in the
preliminary economic assessment ("PEA") of the Filo del Sol
Project, completed in November, 2017, including:
- Evaluating processing methods to take advantage of the fast
leach kinetics noted in the metallurgical testwork completed to
date, which could increase metals recoveries throughout the zones.
If successful, this could lead to a smaller operating footprint,
could eliminate the permanent copper and on/off leach pads and
their associated materials handling systems, and saving on
operating costs associated with these installations;
- Evaluating opportunities to optimize 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 began in April
2018 and is ongoing, 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 updated Mineral Resource estimate and a PFS
currently underway on the Filo del Sol Project, together with a
treasury of $8.1 million at
June 30, 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)
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|
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Three months
ended
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Six months
ended
|
|
|
June
30,
|
June
30,
|
|
|
2018
|
2017
|
2018
|
2017
|
Exploration and
project investigation
|
|
3,595
|
1,257
|
16,728
|
10,187
|
General and
administration ("G&A")
|
|
837
|
785
|
2,331
|
1,420
|
Net loss
|
|
4,447
|
2,053
|
18,837
|
11,566
|
Basic and diluted
loss per share
|
|
0.06
|
0.03
|
0.27
|
0.19
|
The financial
information in this table were selected from the Company's
condensed interim consolidated financial statements for the three
and six months ended June 30 2018 (the "Financial Statements"),
which are available on SEDAR at
www.sedar.com and the Company's website
www.filo-mining.com.
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SELECTED FINANCIAL INFORMATION
(In thousands of
Canadian dollars)
|
|
|
June
30,
|
|
December
31,
|
|
|
2018
|
|
2017
|
Cash
|
|
8,121
|
|
2,417
|
Working
capital
|
|
7,468
|
|
1,462
|
Mineral
properties
|
|
6,844
|
|
6,479
|
Total
assets
|
|
15,901
|
|
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.
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The Company incurred a net loss of $4.4
million during the current quarter, comprised of
$3.6 million and $0.8 million in exploration and project
investigation costs and G&A costs, respectively, compared to a
net loss of $2.1 million for the
three months ended June 30, 2017. The
variance is primarily due to relative levels of exploration
activity undertaken during the respective periods. Specifically,
the larger net loss incurred during the three months ended
June 30, 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 June 30, 2018, the Company
had cash of $8.1 million and net
working capital of $7.5 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 tandem equity offerings, which
closed in February 28, 2018 (the
"Financings"). This cash inflow has been partially offset by funds
directed towards advancing the Filo del Sol Project, and to a
lesser extent, $0.5 million in
relation to the annual option payment made for the Tamberias
property in June 2018, funds spent
for general corporate purposes and repayment of a short-term credit
facility used by the Company prior to closing of the Financings, 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 technical information relating to the PEA is based on
a 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 and six months ended June 30, 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 August 9, 2018 at
4:00 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") 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 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 information
should not be unduly relied upon. Information contained in
this press release is as of the date of this press release.
In particular, this press release contains forward-looking
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 information pertaining to the undertaking of
and timing for the completion of a Pre-Feasibility Study;
expected timing for the filing of a technical report concerning the
updated mineral resource estimate expected timing for the results
of metallurgical testwork; use of proceeds from the Financings;
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 the Company's actual results and future events could
differ materially from those anticipated in such statements, as a
result of the factors discussed in the "Risk and Uncertainties"
section of the Company's most recent management's discussion and
analysis and elsewhere and in the "Risk Factors" section in the
Company's most recent Annual Information Form, which are available
under the Company's profile on SEDAR at www.sedar.com. 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.