Excellon Reports Third Quarter 2019 Financial Results
www.excellonresources.com
EXCELLON REPORTS THIRD QUARTER 2019 FINANCIAL RESULTS
Toronto, Ontario – November 6 , 2019 – Excellon Resources Inc. (TSX:EXN, EXN.WT, OTC:EXLLF and
FRA:E4X1) ("Excellon" or the “Company") is pleased to report financial results for the three- and nine-
month periods ended September 30, 2019.
Q3 2019 Financial Highlights (compared to Q3 2018)
• Revenues of $5.9 million (Q3 2018 – $2.6 million)
• Silver equivalent (“AgEq”) production of 427,131 ounces (Q3 2018 – 300,766 AgEq ounces)
• AgEq ounces payable sold of 370,376 (Q3 2018 – 258,920 AgEq ounces payable)
• Mined tonnage 39% higher in 9-mos 2019 relative to 9-mos 2018
• Gross loss of $0.9 million (Q3 2018 – loss of $3.5 million)
• Total cash cost per Ag oz payable of $18.18 (Q3 2018 – $29.94)
• All-in sustaining cost net of byproducts per Ag oz payable (“AISC”) of $28.46 (Q3 2018 – $44.02)
• Net loss of $2.9 million or $0.03/share (Q3 2018 – net loss of $3.6 million or $0.04/share)
• Net working capital totaled $9.0 million at September 30, 2019 (June 30, 2019 – $3.8 million),
following CAD$11.5 million equity financing to advance exploration and capital expenditures
• Acquired an option to earn 100% interest on Silver City Project in Saxony, Germany
“Metal recoveries were lower than planned this quarter, which impacted revenues and by-product credits,”
stated Brendan Cahill, President and CEO. “ Revenue was also impacted by delayed ore processing and
concentrate delivery late in the quarter and we have taken steps to improve these logistics going forward.
Despite this, mining operations at Platosa were steady, with ongoing improvement in silver grades through
our efforts to reduce dilution. Our focus going forward is to improve grades and recoveries. The mine has
now accessed the 910 elevation in the Pierna Manto, which is expected to improve base metal grades in
the fourth quarter. Additionally, we changed management at our processing facility in mid -October and
have begun to realize improved recoveries with the implementation of flow sheet optimizations.”
Financial Results
Financial results for the three - and nine-month periods ended September 30, 201 9 and 201 8 were as
follows:
(‘000s of USD, except amounts per share
and per ounce)
Q3 2019
Q3 2018 9-Mos 2019
9-Mos 2018
Revenue (1) 5,943 2,570 19,795 18,358
Production costs (5,790) (5,221) (17,199) (14,353)
Depletion and amortization (1,140) (876) (3,458) (3,012)
Cost of sales (6,930) (6,097) (20,657) (17,365)
Gross profit (loss) (987) (3,527) (862) 993
Corporate administration (1,151) (1,021) (3,540) (3,926)
Exploration (858) (1,021) (2,829) (2,782)
Other (200) 368 (439) (47)
Net finance cost (71) 1,081 (459) 1,696
Income tax recovery (expense) 365 538 (765) 516
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(‘000s of USD, except amounts per share
and per ounce)
Q3 2019
Q3 2018 9-Mos 2019
9-Mos 2018
Net income (loss) (2,902) (3,582) (8,894) (3,550)
Income (loss) per share – basic (0.03) (0.04) (0.09) (0.04)
Cash flow from (used in) operations (2) (1,554) (4,125) (2,324) (1,401)
Production cost per tonne (3) 339 291 304 246
Cash cost per silver ounce payable net of byproducts ($/Ag oz) 18.18 29.94 12.58 8.50
All-in sustaining cost (“AISC”) per silver ounce payable ($/Ag oz) 28.46 44.02 22.51 20.54
Realized prices:(4)
Silver – ($US/oz)
Lead – ($US/lb)
Zinc – ($US/lb)
17.65
0.94
1.07
14.51
0.92
1.11
15.78
0.88
1.15
15.74
1.02
1.30
(1) Revenues are net of treatment and refining charges.
(2) Cash flow from operations before changes in working capital.
(3) Production cost per tonne includes mining and milling costs excluding depletion and amortization.
(4) Average realized price is calculated on current period sale deliveries and does not inc lude the impact of prior period provisional
adjustments in the period.
Net revenues increased by 31% to $5.9 million in Q3 2019 ($2.6 million in Q3 2018) due to increased AgEq
ounces payable of 370,376 (258,920 AgEq ounces payable) and higher realized silver prices, partially offset
by lower zinc prices.
Cost of sales, including depletion and amortization, increased 14% between Q3 2019 and Q3 2018 due to
higher labour cost, higher depreciation and amort ization cost, increased administration cost related to
the replacement of the security contractor and recruiting fees for key positions at both Platosa and Miguel
Auza. These increases were partially offset by improved efficiencies realized at the mine leading to lower
consumable items, in particular, reduced use of explosives due to optimized drilling, loading practices and
load design.
The Company recorded a net loss of $ 2.9 million in Q3 2019 (Q3 2018 – net loss of $3.6 million). The
primary contributors to the loss were increased cost of sales, a fair value adjustment difference in finance
cost resulting from the outstanding $0.50 warrants in Q3 2019 and a difference in unrealized gains from
currency hedges.
Exploration drilling continued on the Platosa property with 2,940 metres drilled in Q 3 2019 (Q3 2018 –
1,809 metres). Exploration costs of $0.9 million (Q 3 2018 – $1.0 million) were lower during the current
quarter as the Company completed geophysics programs at Platosa in 2018. Drilling also continued on the
Evolución property with 2,775 metres drilled in Q3 2019 (Q3 2018 – 2,933 metres).
Cash cost net of by -products per silver ounce payable (or Total Cash Cost) were $18.18 in Q3 2019 (Q3
2018 – $29.94). AISC net of byproducts per silver ounce payable in Q3 2019 of $28.46 resulted from higher
Total Cash Cost (Q3 2018 – $44.02). AISC excluding non -cash items was $27.38 in Q3 2019 (Q3 2018 –
$41.44).
All financial information is prepared in accordance with IFRS, and all dollar amounts are expressed in U.S.
dollars unless otherwise specified. The information in this press release should be read in conjunction with
the Compan y’s unaudited condensed interim consolidated financial statements for the three and nine
month periods ended September 30, 2019 and associated management discussion and analysis (“MD&A”)
which are available from the Company’s website at www.excellonresources.com and under the Company’s
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profile on SEDAR at www.sedar.com.
The discussion of financial results in this press release includes reference s 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 the three- and nine -month periods ended
September 30, 2019, for a reconciliation of these measures to reported IFRS results.
Operating Results
Operating performance for the periods indicated below was as follows:
Q3 Q3 9-Mos 9-Mos
2019 2018 2019 2018
Tonnes of ore mined: 18,167 10,974 56,967 40,905
Tonnes of ore processed: 17,235 11,141 53,968 40,743
Tonnes of historical stockpile processed: - 6,765 1,450 18,921
Total tonnes processed: 17,235 17,907 55,419 59,663
Ore grades:
Silver (g/t) 512 416 520 461
Lead (%) 4.44 3.74 4.81 4.85
Zinc (%) 5.97 4.33 7.13 7.23
Historical stockpile grades:
Silver (g/t) - 151 123 166
Lead (%) - 1.36 1.22 1.57
Zinc (%) - 1.45 1.44 2.05
Blended head grade (ore and historical stockpiles):
Silver (g/t) 512 316 509 367
Lead (%) 4.44 2.84 4.72 3.81
Zinc (%) 5.97 3.24 6.98 5.59
Recoveries:
Silver (%) 87.2 89.9 89.2 89.2
Lead (%) 77.7 74.2 78.9 78.8
Zinc (%) 76.5 78.2 78.1 81.3
Production(1)
Silver – (oz) 257,497 171,227 794,746 643,390
AgEq ounces (oz)(2) 427,131 300,766 1,532,330 1,420,050
Lead – (lb) 1,304,538 823,982 4,444,278 3,947,367
Zinc – (lb) 1,654,175 1,005,767 6,363,203 6,069,780
Payable:(3)
Silver ounces – (oz) 227,350 147,308 730,322 562,693
AgEq ounces (oz)(2) 370,376 258,920 1,414,106 1,234,284
Lead – (lb) 1,182,211 758,761 4,203,295 3,671,523
Zinc – (lb) 1,322,133 826,310 5,796,157 5,053,256
(1) Period deliveries remain subject to assay and price adjustments on final settlement with concentrate purchaser (s). Data has been
adjusted to reflect final assay and price adjustments for prior period deliveries settled during the period.
(2) AgEq ounces established using average realized metal prices d uring the period indicated applied to the recovered metal content of
the concentrates.
(3) Payable metal is based on the metals shipped and sold during the period and may differ from production due to these reasons.
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Outlook
During Q3 2019, the operation accessed multiple ore faces with significantly improved grades relative to
Q3 2018. Development has accessed the 910 elevation in the Pierna Manto, which is expected to further
improve base metal grades in the fourth quarter. The Company will continue to implement efficiencies
underground to improve dilution and grades to achieve steady production rates. In addition, the Company
recently entered into an energy contract with a private provider to reduce electricity costs at Platosa. The
benefits of this agreement are expected to be realized in H1 2020.
In Q4, the Company expects to achieve increased recoveries and throughput at the processing facility as
flow sheet upgrade s are implemented and approximately 1,000 tonnes of fresh ore that remained in
stockpile at quarter-end in Q3 are processed.
As noted above, minor adjustments at the Miguel Auza processing facility are ongoing and the mill is
processing a bulk sample from Hecla’s San Sebastian Mine. During Q3 2019, approximately 6,635 tonnes
were processed with a total of 12,000 tonnes processed year‐to‐date. The 25,000 tonne bulk sam ple
program i s expected to continue into Q1 2020 with a formal commercial milling arrangement to be
determined in due course.
The Company is currently preparing to mobilize a drill rig to the PDN target, located two kilometers north
of the Platosa mine. PDN is a skarn-style target believed to be related to mineralization encountered by
the Company nearby in 2012. Additionally, underground access for a new exploration drift is currently
being established to in-fill and define mineralization along the eastern extent of the Pierna and Rodilla
mantos. The Company is also drilling the Lechuzas structure on the Evolución Property with drill results
pending. Furthermore, preparation of drill permitting for the Silver City Project in Saxony, Germany is
underway.
Management Update
The Company also announced that Marcello Locatelli has stepped down as as Vice President Special
Projects, but will continue to provide consulting services to the Company.
About Excellon
Excellon’s 100% -owned Platosa Mine has been Mexico’s highest -grade silver mine since production
commenced in 2005. The Company is focused on optimizing Platosa’s cost and production profile,
discovering further high -grade silver and carbonate replacement d eposit mineralization on the 21,000 -
hectare Platosa Project and epithermal silver mineralization on the 100% -owned 45,000 -hectare
Evolución Property, and capitalizing on current market conditions by acquiring undervalued projects. The
Company also holds an option on the 164 km 2 Silver City Project in Saxony, Germany, a high -grade
epithermal silver district with 750 years of mining history and no modern exploration.
Additional details on Excellon’s properties are available at www.excellonresources.com.
For Further Information, Please Contact:
Excellon Resources Inc.
Brendan Cahill, President & Chief Executive Officer or
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Anna Ladd-Kruger, Chief Financial Officer & VP Corporate Development
(416) 364-1130
www.excellonresources.com
Forward-Looking Statements
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 fut ure results of
operations, performance and achievements of the Company, including potential prop erty acquisitions, the timing, content, cost and results of
proposed work programs, the discovery and delineation of mineral deposits/resources/reserves, geological interpretations, pro posed 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 Compa ny 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, the Company's inability to obtain any necessary permits, co nsents or
authorizations required for its activities, to produce minerals fro m 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 September 7, 2018 NI 43-101 technical report prepared by SRK Consulting (Canada) 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.