Elemental Royalties Announces Q2 2021 Results
Elemental Royalties Announces Q2 2021
Results
VANCOUVER, BC
,
Aug. 23, 2021
/CNW/ - Elemental Royalties Corp. ("
Elemental
" or "the
Company
") (TSXV: ELE) (OTCQX: ELEMF) is pleased to announce its operating and financial
results for the three and six months ended
June 30, 2021
. For complete details please refer to the
Financial Statements and associated Management Discussion and Analysis for the three and six
months ended
June 30, 2021
, available on SEDAR (
www.sedar.com
) or the Company's website (
www.elementalroyalties.com
).
Frederick Bell
, CEO of Elemental commented,
"The highlight of Q2 was the successful first gold
pour at our cornerstone Karlawinda royalty in
Australia
. Completed on time and on budget,
Karlawinda is a high-quality mine that materially de-risks the Company's royalty portfolio with
approximately 80% by NAV now coming from operating assets.
With active exploration programs underway across the portfolio, we look forward to continued
organic resource growth and additional value being created for shareholders at no cost to the
Company. We also remain engaged on a robust pipeline of royalty opportunities to complement
the doubling of royalty revenue expected going into 2022."
Asset Highlights
Commissioning and first gold pour at cornerstone royalty Karlawinda with an expected life of
mine annual production run rate of 110,000 – 125,000 gold ounces
Wahgnion performing well and on track for 2021 production of 158,000 – 173,000 gold ounces.
Over
9,500m
of drilling completed, representing approximately 25% of the exploration budget
and the program is expected to ramp up in H2 2021
Amancaya maintained 2021 guidance of 45,000 to 50,000 gold equivalent ounces plus the sale
of approximately 6,000 ounces of gold in bullion following disruptions in Q2 2021 primarily due
to equipment availability
First royalty revenue received from the new Tuart underground mine at
Mount Pleasant
, where
Zijin Mining's (SSE: 601899, HKG: 2899) fully owned subsidiary Norton Goldfields is undertaking
development work
Equinox Gold (TSX/NYSE-A: EQX) completed the acquisition of Premier Gold Mines, operator
of the producing Mercedes mine where Elemental holds a 1% NSR royalty that will be paying
from
July 2022
following a time hurdle
Future Metals (ASX: FME) completed the acquisition of the Panton PGM project where
Elemental holds a 0.5% NSR royalty with a
10,000m
drill program to commence in Q3 2021
Financial Highlights
Revenue of
US$1.2 million
generated from four royalties, with Karlawinda to start contributing
from Q3
683 attributable gold equivalent ounces
1
sold in Q2 2021 and 1,323 attributable gold equivalent
ounces
1
sold in H1 2021 at zero cash cost to the Company
2021 guidance of 4,000 to 4,400 gold equivalent ounces and
US$7.0
– 7.9 million remains
unchanged, weighted towards H2 2021
Adjusted EBITDA
1
of
US$0.6 million
for Q2 2021 and
US$1.2 million
for H1 2021
Net loss of
US$1.2 million
for Q2 2021 and
US$2.3 million
for H1 2021
Cash and cash equivalents of
US$6.2 million
as of
June 30, 2021
Outlook
Elemental maintains guidance of 4,000 to 4,400 attributable zero-cost gold equivalent ounces
1
in
2021 from its existing portfolio, weighted towards the second half of the year, with over 90% of
expected revenue derived from gold.
Asset Updates
Karlawinda (2% NSR)
Capricorn Metals ("Capricorn") (ASX: CMM) announced that it poured first gold on
June 30,
2021
at its wholly owned Karlawinda Gold Project in
Western Australia
Gold bars weighing 12.0 kg (386 ounces) were poured and gold production (including gold -in-
circuit) for the first week of operations totalled 2,360 ounces
Processing plant achieved laterite component of throughput guidance on a periodic basis with
oxide/laterite blended feed in August to increase throughput rates
Commissioning and optimisation of processing plant continuing to ramp up to guidance
throughput rates on a steady state basis by end of Q3 2021 with results already showing
encouraging early grade and recovery performance
600,000 tonnes of ore on ROM and further 1.2Mt of ore exposed in open pit. Grade control
drilling completed on Bibra laterite zone validating reserve model
Commencement of infill and near mine exploration drilling with a view to Reserve additions and
the discovery of new Resources to provide mine life extensions
Wahgnion (1% NSR)
Wahgnion produced 40,592 gold ounces in Q2 2021 and sold 47,704 gold ounces in Q2 2021
Total tonnes and ore mined remained fairly consistent and materially above the original mine
plan. Ore mined was sourced mainly from the Nogbele North and Nogbele South pits and
supplemented with ore from the Fourkoura pit, where mining commenced earlier this year
Well positioned to meet 2021 guidance, with the mine expected to produce 140,000 – 155,000
ounces in the post-
Endeavour
acquisition period commencing on
10 February 2021
for a total of
158,000 – 173,000 ounces in the year
The 2021 exploration program, with a planned expenditure of approximately
US$12.0 million
, will
focus on the complex and stacked lodes at Nogbele North and Nogbele South deposits. These
deposits account for more than half of the Measured and Indicated Resource with drilling
targeting the continuation of mineralized structures between the Nogbele pits.
Additionally,
Endeavour
is targeting continuation of the Fourkoura deposit and the Hillside
prospect. On the exploration permits efforts will be focused on various attractive targets such
as Kafina West and Korindougou
Amancaya (2.25% NSR)
Production at Amancaya during Q2 2021 has improved after the completion of outsourcing to a
new underground mining contractor at Amancaya. A total of 8,351 gold equivalent ounces were
produced during the quarter with 6,856 gold equivalent ounces sold and approximately 2,000
gold ounces in inventory awaiting sale
Austral announced consistent monthly improvements at the Guanaco-Amancaya mine complex
and expect production to gradually increase to achieve annual guidance of 45,000-50,000 gold
equivalent ounces
Amancaya has seen a continued focus on exploration and organic growth with a clear plan to
extend the mine life resulting in the discovery two new veins in the immediate vicinity of the
Amancaya mine workings. Highlights from the second round of drilling on these veins reported in
May 2021
include:
2.41 meters @ 10.19 g/t gold and 55 g/t silver (DAM-024)
1.17 meters @ 24.98 g/t gold and 77 g/t silver (DAM-026)
4.27 meters @ 7.81 g/t gold and 33 g/t silver (DAM-019)
1.8 meters @ 3.1 g/t gold and 1.5 g/t silver (DAM-016)
Further drilling is planned on these veins in H2 2021
Mercedes (1% NSR)
On
April 7, 2021
Equinox Gold (TSX/NYSE-A: EQX) completed the acquisition of Premier Gold
Mines to create a mid-tier gold miner with 7 operating assets
Royalty revenue is due to Elemental after the earlier of: (a) the date on which 450,000 ounces
of gold equivalent have been produced after
July 28, 2016
or (b) the sixth anniversary of that
date (
July 28, 2022
). Elemental expects that as a result of the COVID-19 stoppages, the start
of royalty payments are likely to be payable from
July 28, 2022
, rather than the 450,000 ounce
production hurdle
The focus at Mercedes is currently on the promising, fast-evolving Diluvio/Lupita/San Martin
system while also implementing continued exploration, underground development, and mill
maintenance programs with the intention of returning to full annual production of approximately
80,000 to 90,000 ounces
Equinox have guided gold production at Mercedes of 30,000 to 35,000 ounces for the period
post-acquisition on
April 7, 2021
to
December 31, 2021
Laverton (2% Gross Revenue Royalty)
On
April 20, 2021
, Focus Minerals released a Stage 1 Pre-Feasibility Study ("PFS") for
restarting the Barnicoat Mill across only 21% of Focus' Mineral Resource base with substantial
potential for resource growth at Elemental's
Beasley Creek
deposits, which remain open along
strike and where additional infill drilling may lead to an upgrade of the existing higher grade,
shallow Inferred Resources. Recent results from
Beasley Creek
and
Beasley Creek South
included:
16 meters @ 3.62 g/t gold (21BSDD002)
11 meters @ 2.27 g/t gold (21BSDD003)
9 meters @ 2.57 g/t gold (21BSRC019)
9 meters @ 2.32 g/t gold (21BSDD006)
7 meters @ 2.84 g/t gold (21BSDD005
4 meters @ 4.88 g/t gold (21BSDD005)
Geotechnical, metallurgical and hydrogeological studies are being advanced with the objective
of increasing grade and tonnage of ore feed from
Beasley Creek
for the Stage 2 Laverton PFS
Resource update for
Beasley Creek
expected in the
December 2021
quarter
Kwale (0.25% Gross Royalty)
In Q2 2021, Base Resources (ASX: BSE) produced 88,735 tonnes of ilmenite, 20,116 tonnes of
rutile and 7,511 tonnes of zircon, selling 93,959 tonnes of ilmenite, 24,597 tonnes of rutile, and
8,388 tonnes of zircon
Mining operations continued according to plan on the South Dune orebody with mined tonnage
increasing slightly
Global pigment demand continued to strengthen through the quarter as Chinese pigment
producers continued to operate at near capacity output levels while western pigment producers
have now returned to full production following a gradual ramp up since the COVID-19 related
production cuts in late 2020
Mount Pleasant
(5% NPI or
A$10
/oz Royalty)
Initial underground development is underway on the Tuart orebody, one of the material
resources covered by Elemental's royalty at Norton Goldfields' Mount Pleasant Operations
Tuart has a historical JORC 2012 compliant Indicated Resource of 212,000 ounces of gold at
1.8 g/t and Inferred Resource of 232,000 ounces of gold at 3.8 g/t
2
on both conceptual
underground and open pit mineralisation
Panton (0.5% NSR)
Future Metals NL (ASX: FME) acquired Great Northern Palladium Pty Ltd ("GNP"), which
owned 80% of the Panton project, and subsequently exercised an option over the remaining
20%
A
10,000m
diamond drilling program is expected to commence in Q3 2021
Specialist PGM metallurgical consultant appointed to review historical flotation test work,
confirms metallurgical recoveries for of 81.4% 3PGM (platinum, palladium and gold) recovery to
a low mass pull (2.5%) concentrate grading 271 g/t 3PGM
Panton has a Measured and Indicated JORC (2012) Resource of 12.2Mt @ 2.46g/t Pd, 2.25g/t
Pt, 0.3g/t Au, 0.26% Ni, 0.07% Cu for 963,000 ounces Pd and 878,000 ounces Pt; and an
Inferred JORC Resource of 2.2Mt @ 2.0g/t Pd, 1.9g/t Pt, 0.3g/t Au. 0.31% Ni, 0.11% Cu, for
139,000 ounces Pd and 129,000 ounces Pt
3
Western Queen (
A$6
to
A$20
/oz Royalty)
Rumble has completed and announced three phases of over
30,000m
of
Diamond Core
, RC
and AC drilling
Database compilation and associated resource estimation work for the multiple resource zones
has commenced and is expected during Q3 2021
On behalf of Elemental Royalties Corp.
Frederick Bell
CEO and Director
TSX.V: ELE | OTCQX: ELEMF | ISIN: CA28619L1076
About Elemental Royalties
Elemental is a gold-focused royalty company listed on the TSX-V in
Canada
and provides investors
with lower risk precious metals exposure through a portfolio of nine high-quality royalties. This
enables investors to benefit from ongoing royalty revenue, future exploration upside and low
operating costs. Elemental's experienced team seeks to secure royalties in advanced precious
metals projects, run by established operators, from its pipeline of identified opportunities.
Qualified Person
Richard Evans
, FAusIMM, is Senior Vice President Technical for Elemental, and a qualified person
under National Instrument 43-101 – Standards of Disclosure for Mineral Projects, has reviewed and
approved the scientific and technical disclosure contained in this press release.
Neither the TSX-V nor its Regulation Service Provider (as that term is defined in the policies
of the TSX-V.) accepts responsibility for the adequacy or accuracy of this press release.
1
Elemental has included certain performance measures in this press release that do not have any
standardized meaning prescribed by International Financial Reporting Standards (IFRS). The
Company's royalty revenue is converted to an attributable gold equivalent ounce basis by dividing
the royalty revenue received in a period by the average gold price for the same respective period.
The presentation of this non-IFRS measure is intended to provide additional information and
should not be considered in isolation or as a substitute for measures of performance prepared in
accordance with IFRS. Other companies may calculate these non-IFRS measures differently. The
production forecast was derived using information that is available in the public domain as at the
date hereof, which included guidance and estimates prepared and issued by management of the
operators of the mining operations in which Elemental holds an interest. The production forecast is
sensitive to the performance and operating status of the underlying mines. None of the information
has been independently verified by Elemental and maybe subject to uncertainty. There can be no
assurance that such information is complete or accurate.
2
The Tuart deposit in Elemental's
Mt Pleasant
royalty area has been assigned a historical
resource estimate on both conceptual underground and open pit mineralisation on the basis of
Norton Gold Fields Limited's announcement dated
February 3, 2015
, titled "
January 2015
Mineral
Resource & Ore Reserve update". The estimate was prepared by Norton Goldfields Ltd (ASX:
NGF) in accordance with the JORC Code 2012 for the situation at
Dec 31, 2014
, and is available
on the ASX website at:
https://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01596085
.
Elemental believes that the resources disclosed are fundamentally reliable but they should not be
relied on as a current resource estimate, and no qualified person of Elemental has done sufficient
work to classify the above estimate as current Mineral Resources. Elemental is not treating the
historical estimate as current Mineral Resources or Mineral Reserves and it is unknown how much
of the historical resource will be economic under the proposed mine plan. Elemental understands
that there has been no production from the area since the historical resource estimate was
published
3
Panoramic Resources Ltd.'s ASX announcements dated
September 30, 2015
, titled "Mineral
Resources and Ore Reserves at
June 30, 2015
", The ASX announcement is prepared in
accordance with the JORC Code and is available on Panoramic's website at
https://panoramicresources.com/asx-announcements/
.
Cautionary note regarding forward-looking statements
This release contains certain "forward looking statements" and certain "forward-looking information"
as defined under applicable Canadian securities laws. Forward-looking statements and information
can generally be identified by the use of forward-looking terminology such as "may", "will", "should",
"expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology.
Forward-looking statements and information include, but are not limited to, statements with respect
to the future growth and development of the Company. Forward-looking statements and information
are based on forecasts of future results, estimates of amounts not yet determinable and
assumptions that, while believed by management to be reasonable, are inherently subject to
significant business, economic and competitive uncertainties and contingencies. Forward-looking
statements and information are subject to various known and unknown risks and uncertainties, many
of which are beyond the ability of Elemental to control or predict, that may cause Elemental's actual
results, performance or achievements to be materially different from those expressed or implied
thereby, and are developed based on assumptions about such risks, uncertainties and other factors
set out herein, including but not limited to: the requirement for regulatory approvals and third party
consents, the impact of general business and economic conditions, the absence of control over the
mining operations from which Elemental will receive royalties, including risks related to international
operations, government relations and environmental regulation, the inherent risks involved in the
exploration and development of mineral properties; the uncertainties involved in interpreting
exploration data; the potential for delays in exploration or development activities; the geology, grade
and continuity of mineral deposits; the impact of the COVID-19 pandemic; the possibility that future
exploration, development or mining results will not be consistent with Elemental's expectations;
accidents, equipment breakdowns, title matters, labor disputes or other unanticipated difficulties or
interruptions in operations; fluctuating metal prices; unanticipated costs and expenses; uncertainties
relating to the availability and costs of financing needed in the future; the inherent uncertainty of
production and cost estimates and the potential for unexpected costs and expenses, commodity
price fluctuations; currency fluctuations; regulatory restrictions, including environmental regulatory
restrictions; liability, competition, loss of key employees and other related risks and uncertainties.
Elemental undertakes no obligation to update forward-looking information except as required by
applicable law. Such forward-looking information represents management's best judgment based on
information currently available. No forward-looking statement can be guaranteed, and actual future
results may vary materially. Accordingly, readers are advised not to place undue reliance on
forward-looking statements or information.
SOURCE
Elemental Royalties Corp.
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For further information:
Corporate Inquiries: Dustin Zinger, Investor Relations Manager, Corporate
Website: www.elementalroyalties.com, Direct: +1 (604) 653-9464, Email:
[email protected], Elemental is a proud member of Discovery Group. For more
information please visit: www.discoverygroup.ca or contact 604-653-9464.
CO: Elemental Royalties Corp.
CNW 06:00e 23-AUG-21