Excellon Resources Inc. (TSX: EXN) (OTCQB: EXNRF) (FRA: E4X2) is pleased to report financial results for the three- and twelve-month periods ended December 31, 2022.
2022 Financial and Operational Highlights (compared to 2021)
Financial results for the periods indicated below were as follows:
|(‘000s of USD, except amounts per share and per ounce)||Q4 2022||Q4 2021||2022||2021|
|Mine closure related costs||(375)||(1,584)||(907)||(735)|
|Depletion and amortization||(1,127)||(1,928)||(7,497)||(7,300)|
|Cost of sales||(3,557)||(10,601)||(26,459)||(33,507)|
|Gross (loss) profit||(993)||(1,295)||(635)||4,448|
|General and administrative including care-and-maintenance||(1,940)||(1,255)||(5,721)||(6,689)|
|Exploration and holding expense||(1,277)||(1,783)||(5,576)||(7,194)|
|Other income (expense)||325||89||1,111||(758)|
|Provision for litigation||–||(5)||–||(22,282)|
|Net finance expense||(1,208)||(1,242)||(4,294)||(3,680)|
|Income tax expense||(185)||(167)||(379)||(5,078)|
|Adjusted net loss (2)||(4,903)||(4,069)||(14,591)||(14,311)|
|Loss per share – basic and diluted||(0.23)||(0.65)||(0.54)||(1.77)|
|Adjusted loss per share – basic and diluted (2)||(0.13)||(0.12)||(0.42)||(0.44)|
|Cash flow from operations (3)||(1,386)||(217)||(1,167)||1,652|
|Production cost per tonne (4)||261||314||261||291|
|Cash cost per silver ounce payable net of by-products ($/Ag oz)||16.28||15.61||11.80||13.01|
|AISC per silver ounce payable ($/Ag oz) (5)||30.19||24.82||18.31||24.78|
|Realized prices: (6)|
|Silver – ($US/oz)||18.99||23.30||21.13||25.12|
|Lead – ($US/lb)||0.88||1.06||0.96||1.00|
|Zinc – ($US/lb)||1.36||1.53||1.64||1.37|
|(1)||Revenues are net of treatment and refining charges (“TC/RCs”).|
|(2)||Adjusted loss and adjusted loss per share exclude: for 2021, $22.3 million related to the Provision for litigation, the related $0.8 million impairment loss and $3.1 million deferred-tax asset derecognition expenses and for Q4 2021, impairment losses of $15.8 million and $1.6 million related to future mine closure accruals. For 2022, $0.5 million write-down of materials and supplies and for Q4 2022, impairment losses of $3.3 million and $0.4 million related to the write-down of materials and supplies.|
|(3)||Cash flow from operations before changes in working capital.|
|(4)||Production cost per tonne includes mining and milling costs, excluding depletion and amortization, materials and supplies write-down, and inventory adjustments.|
|(5)||AISC per silver ounce payable excludes administrative and share-based payment costs attributable to the Company’s non-producing projects and includes underground drilling costs.|
|(6)||Average realized price is calculated on current period sale deliveries and does not include the impact of prior period provisional adjustments in the period.|
This news release should be read in conjunction with the Company’s consolidated financial statements for the years ended December 31, 2022 and 2021, and associated management discussion and analysis which are available on the Company’s website at www.excellonresources.com and under the Company’s profile on SEDAR (www.sedar.com).
All financial information is prepared in accordance with IFRS, and all dollar amounts are expressed in U.S. dollars unless otherwise specified. The discussion of financial results in this news release includes references to “cash flow from operations before changes in working capital items”, “production cost per tonne”, “cash cost per silver ounce payable”, and “AISC per silver ounce payable”, which are non-IFRS performance measures. The Company presents these measures to provide additional information regarding the Company’s financial results and performance. Please refer to the Company’s MD&A, for a reconciliation of these measures to reported IFRS results.
Operating performance for the periods indicated below was as follows:
|Metal Production: (1)|
|Silver – (oz)||76,219||271,525||891,185||1,222,991|
|Lead – (lb)||355,536||1,717,525||4,641,708||7,612,332|
|Zinc – (lb)||304,975||2,167,840||5,358,103||9,014,028|
|Silver equivalent (“AgEq”) (oz) (3)||114,536||492,013||1,517,940||2,017,639|
|Silver – (oz)||75,728||287,953||827,618||1,141,281|
|Lead – (lb)||328,871||1,762,293||4,291,803||7,073,488|
|Zinc – (lb)||449,325||1,697,098||4,477,550||7,101,992|
|AgEq (oz) (3)||123,147||479,566||1,370,132||1,810,199|
|(1)||Period deliveries remain subject to assay and price adjustments on final settlement with concentrate purchaser. Data has been adjusted to reflect final assay and price adjustments for prior-period deliveries settled during the period.|
|(2)||The production results for the year ended December 31, 2022 were impacted by the wind down of production at Platosa in early Q4 2022.|
|(3)||AgEq ounces established using average realized metal prices during the respective period applied to the recovered metal content of the concentrates to calculate the revenue contribution of base metal sales during the period.|
In early Q4 2022, production ceased at the Platosa Mine and Miguel Auza mill and the sites were transitioned into care–and–maintenance.
For further details on operating results for the three and twelve-month periods ended December 31, 2022, refer to the Company’s Financial Statements and MD&A for the same period.
On January 9, 2023, the Company announced it had entered into a definitive acquisition agreement to acquire the permitted, past-producing La Negra Mine in Mexico. The Company is continuing to take steps necessary to advance the acquisition and discussions with potential investors in the equity offering proposed to be completed in connection with the acquisition. The required meeting of Excellon shareholders to approve the issuances of Excellon common shares contemplated by the acquisition (including pursuant to the closing equity offering and restructuring of the Company’s outstanding debentures) and, in turn, completion of the acquisition, are now expected to occur no later than end of June (as opposed to the previously announced April target dates), subject to the successful completion of the proposed equity offering and receipt of conditional listing approval of the Toronto Stock Exchange in respect of the acquisition and related matters. The Company is in discussions with the seller regarding the proposed timeline for the shareholder meeting and completion of the acquisition. The Company continues to strongly believe in the forward-looking value proposition of the La Negra acquisition to Excellon and its shareholders and remains optimistic that the acquisition and related transactions (including the closing equity offering) can be successfully completed in due course.
In addition, the Company is considering various other potential financing, corporate development and strategic opportunities that may include acquisitions, divestitures, mergers or spin-offs of the Company’s or third parties’ assets, as applicable, to compliment the Company’s go-forward strategy.
Excellon’s vision is to realize opportunities for the benefit of our employees, communities and shareholders, through the acquisition of advanced development or producing assets with further potential to gain from an experienced operational management team. The Company is advancing a portfolio of gold, silver and base metals assets including Kilgore, an advanced gold exploration project in Idaho; and Silver City, a high-grade epithermal silver district in Saxony, Germany with 750 years of mining history and no modern exploration. The Company has also entered into an agreement to acquire La Negra, a past-producing Ag-Zn-Cu-Pb mine with exploration potential, located in Querétaro State, Mexico.
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