Excellon Resources Reports Nine Month Profit and Outlook for Fourth Quarter
TORONTO, Nov. 14, 2012 /CNW/ - Excellon Resources Inc. (TSX: EXN) ("Excellon" or "the Company"), Mexico's highest grade silver producer, is pleased to announce financial results for the third quarter of 2012
and provide an updated outlook on fourth quarter production.
"While the third quarter of 2012 was difficult due to the illegal blockade at La Platosa, we remain on course for a successful year and have had a profitable first nine months. We have now returned to full production at La Platosa, the highest grade and one of the lowest cost silver mines in Mexico," stated Peter Crossgrove, Executive Chairman. "We are looking forward to a successful fourth quarter on both the production and exploration fronts. Our 2012 production to date versus the same period in 2011 has realized significantly higher silver and zinc grades, as well as higher metal recoveries across the board, both of which should lessen the impact of production lost during the third quarter."
Mr. Crossgrove continued, "Our third quarter discovery of Source-style mineralization at the Rincon del Caido area is currently being followed-up on aggressively with four diamond drills. We have also recently commenced a 5,000-metre drill program at the DeSantis Project near Timmins on new and promising targets and we are preparing to resume drilling at our Beschefer Project in Quebec early in 2013."
Highlights of the Nine-Month Period Ended September 30, 2012
- High-grade production of 830,100 ounces grading 876 g/t Ag (25.55 oz/T Ag) at net cash costs of $5.31;
- Discovery of new Source-style mineralization at Rincon del Caido, with results including:
- 132 g/t (3.8 oz/T) Ag, 3.13% Pb and 1.74% Zn over 55.5 m, including 336 g/t (10 oz/T) Ag, 3.27% Pb, 1.96% Zn over 4.10 m in LP1019;
- 146 g/t (4.3 oz/T) Ag, 2.8% Pb, 1.9% Zn and 0.216 g/t Au over 43.4 m, including 381 g/t (11.1 oz/T) Ag, 10.6% Pb, 11.5% Zn, 0.354 g/t Au over 5.8 m in LP1023A;
- Expenditures, fully funded from cash flow, include:
- $2.4 million on drilling at La Platosa for both mantos and Source mineralization;
- $1.3 million on drilling at the DeSantis and Beschefer properties in Canada;
- $1.9 million in capital expenditures at the La Platosa Mine and Miguel Auza Mill;
- $2.4 million to repurchase a 1% net smelter return royalty on the La Platosa Mine, immediately accretive to cash flow - no further royalties payable on La Platosa;
- $2.9 million to repurchase 5.1 million common shares of the Company;
- $5 million invested in the Sprott Physical Silver Trust representing an underlying investment of 134,732 ounces of silver;
- Four drills currently turning at La Platosa to follow up on Source-style discovery, one rig turning at DeSantis on new and promising targets;
- Financial position remains strong, with cash, marketable securities and trade receivables totaling $11.8 million as at September 30, 2012.
Financial and Operating Highlights:
Production at the La Platosa Mine was halted from July 8, 2012 to October 16, 2012 due to an illegal blockade of the mine site.
Financial results for the three and nine-month periods ended September 30, 2012 and 2011 are as follows:
|Three months ended
|Nine months ended
|$ 000's||$ 000's||$ 000's||$ 000's|
|Cost of sales||(3,958)||(6,148)||(14,176)||(14,915)|
|Other income (expense)||1,440||(1,006)||1,102||494|
|Net income (loss) for the period||(4,350)||(976)||1,748||7,534|
|Other comprehensive income (loss)||2,486||(2,392)||1,260||(2,575)|
|Total comprehensive income (loss)||(1,864)||(3,368)||3,008||4,959|
Mine production for the three and nine-month periods ended September 30, 2012 and 2011 was as follows:
|Three months ended
|Nine months ended
|Ore processed (t)||2,151||15,048||36,747||42,366|
Note: "t"= tonne; "T"= ton
Drilling at the Rincon del Caido area of the Platosa property continues to meet with success in the Company's search for the high-tonnage Source of the high-grade Platosa mantos. To date, six holes have intersected significant Ag, Pb and Zn hosted by a skarned marble unit typical of Source deposits in Mexico and elsewhere. The Company plans to continue drill testing the area with four rigs until the end of the year and beyond as results dictate.
The Company's original 2012 Mexican exploration budget was $7.3 million and 30,000 m of drilling was planned for the year, neither of which will be materially affected by the illegal blockade, as drilling resumed with four rigs during the third quarter.
In Canada the Company has started a drilling program on its DeSantis Project in Timmins and expects to complete 5,000 m of drilling by early 2013. A follow up drill program is scheduled for the Company's Beschefer Project in northern Quebec in early 2013.
Due to the illegal blockade, Excellon projects fourth quarter silver production of 250,000 to 270,000 ounces compared to the previously projected 380,000 to 420,000 ounces. The Company's cash costs for the fourth quarter are expected to be US$7.00 to $7.50 per ounce, net of by-products (based on metal price assumptions of $31 per ounce of silver), as the Company will not be able to fully utilize the cost efficiencies of a full production quarter. The Company expects to return to ordinary course net cash costs of $4.25 to $5.00 per ounce of silver during the first quarter of 2013.
Since resuming production at La Platosa on October 16<sup>th</sup>, the Company has produced approximately 5,500 tonnes of ore and has shipped 185 tonnes of concentrate for delivery to port.
The Company plans to spend approximately $0.5 million in the fourth quarter to complete a new access road and security fence, which will reduce ore haulage distance and time from the mine to the mill and will increase general mine site security.
The Company expects to fund all expenditures for the remainder of 2012 from cash generated from operations at La Platosa, reflecting the robustness of the mine and its operations, and expects to maintain a strong financial position through the remainder of 2012.
Excellon's high-grade silver production drives transformative exploration potential. The Company's 100%-owned La Platosa Mine in Durango is Mexico's highest grade silver mine, with lead and zinc by-products making it one of the lowest cash cost silver mines in the country. With 41,000 hectares of exploration ground surrounding the mine, Excellon is focused on discovering the large-tonnage Source of the high-grade silver mantos currently in production. Such a discovery has the potential to transform La Platosa into the next major project in Mexico's prolific CRD/silver belt.
OOn behalf of
EXCELLON RESOURCES INC.
Peter A. Crossgrove
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this Press Release, which has been prepared by management. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 27E of the Exchange Act. Such statements include, without limitation, statements regarding the future results of operations, performance and achievements of the Company, including potential property acquisitions, the timing, content, cost and results of proposed work programs, the discovery and delineation of mineral deposits/resources/reserves, geological interpretations, proposed production rates, potential mineral recovery processes and rates, business and financing plans, business trends and future operating revenues. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking statements as a result of various factors, including, but not limited to, variations in the nature, quality and quantity of any mineral deposits that may be located, significant downward variations in the market price of any minerals produced [particularly silver], the Company's inability to obtain any necessary permits, consents or authorizations required for its activities, to produce minerals from its properties successfully or profitably, to continue its projected growth, to raise the necessary capital or to be fully able to implement its business strategies. All of the Company's public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral properties, and particularly the November 22, 2011 NI 43-101-compliant technical report prepared by Roscoe Postle Associates Inc. with respect to the Platosa Property. This press release is not, and is not to be construed in any way as, an offer to buy or sell securities in the United States.
SOURCE: Excellon Resources Inc.
Excellon Resources Inc.
Joanne C. Jobin, Vice President, Investor Relations
T. (416) 364-1130 E. email@example.com