IMPACT Silver Announces Q2 2023 Results with Revenue up 57% and Strong Operating Income
IMPACT Silver Announces Q2 2023 Results
with Revenue up 57% and Strong Operating
Income
Vancouver, British Columbia--(Newsfile Corp. - August 28, 2023) -
IMPACT Silver Corp. (TSXV: IPT)
(OTC Pink: ISVLF) (FSE: IKL) ("IMPACT" or the "Company")
announces its financial and operating
results for the second quarter ended June 30, 2023. The Company reports revenue of $5.5 million in Q2
2023, representing a 57% increase over revenue of $3.5 million in Q2 2022. Mine operating income
(before amortization and depletion) in Q2 2023 was $0.90 million compared to $0.03 million Q2 2022.
The overall improvement in revenue is due in part to increased gold and silver sales. The net loss in Q2
2023 was $0.9 million compared to a net loss of $0.8 million in Q2 2022. The net loss in the period
includes $0.5 million for G&A costs related to the new Plomosas acquisition as well as one-time costs
related to the marketing of the Company's recent non-brokered private placement.
The Company maintains a strong balance sheet with $13.7 million in cash and no long-term debt. During
the period, the Company completed a $9.0 million, non-brokered private placement and ended the
quarter with working capital of $13.3 million.
On April 3, 2023, the Company closed the acquisition of the Plomosas zinc-lead-silver mine for a total
purchase price of US$6.0 million, consisting of US$3.0 million in cash and the balance in the form of
IMPACT shares (a total of 11,441,647 shares were issued and are subject to certain restrictions). Post
closing adjustments are being made based on changes in working capital.
Zacualpan Silver District
The Company's average mill head grade of 163 g/t during the period was up 2% on a year over year
basis, with increased gold production and sales in Q2 2023 from the new Alacran Mine.
Higher overall
production levels across the Company including silver, lead and gold helped contribute to a 63%
increase in revenue per tonne of $155.67 in Q2 2023 compared to $95.44 in Q2 2022.
The Company continued to focus on exploration and development of the Royal Mines of Zacualpan and
the Plomosas mining districts in Q2 2023 and spent $2.8 million on these programs.
Uncertainty revolving around the state of global economies have contributed to continued demand for
precious and base metals during the period as investors continued their flight to safety to combat
inflation. Moreover, there are strong signs that softer monetary policy is on the horizon as the rate of
interest rate increases has started to slow, adding further support to silver and gold prices during the
period. While cost inflation pressures continue to persist throughout the supply chain and labour network,
much of the year over year cost increases are owed to negative foreign exchange pressures from the
strengthening Mexican peso. This contributed to an increase in direct costs per production tonne in Q2
2023 of $130.67 compared to $94.86 in Q2 2022. Costs may continue to increase in 2023, albeit there
is evidence of a slowing trend in this regard.
Plomosas High-Grade Zinc Mine
During the second quarter, the Company closed on its transformative acquisition of the Plomosas high-
grade zinc mine in northern Mexico. The acquisition provides the Company with a meaningful new
chapter as it expands IMPACT's production profile from one to two producing operations. Plomosas
adds significant and high-grade metal diversification through its high-grade zinc deposit as well as
exciting exploration potential across the property's largely unexplored property area.
During the quarter, the Company began a major rehabilitation program at the mine to bring the asset
back into production following a near one-year hiatus. As of June 30, 2023, the Company was
approaching the later stages of its planned rehabilitation at Plomosas both on time and on budget,
including improvements and upgrades at the mine, mill, plant and surrounding infrastructure.
Fred Davidson, President & CEO of IMPACT, stated, "During the second quarter, our team at
Zacualpan continued to execute on a grade-improvement and cost reduction plan which began in
2022. These efforts have started to bear fruit as seen with the increase in average grade milled and
specifically, the impressive increase in gold production on a year over year basis. While cost
pressures continue to persist, improvements and efficiencies across the system have started to offset
these trends. Meanwhile, our transformative new Plomosas mine is on the doorstep to restarting
production. This top-quartile in zinc grade mine is in an established mining region and will soon start
to generate significant revenue diversification for the Company as we consider further potential
expansion of this new producer in 2024."
Q2 2023 Financial Overview
On April 3, 2023, the Company paid a total of US$6.0 million to acquire the Plomosas zinc-lead-
silver mine, consisting of US$3.0 million in cash and the balance in the form of IMPACT shares (a
total of 11,441,647 shares were issued and are subject to certain restrictions). Post closing
adjustments are being made based on changes in working capital, as agreed to between the two
parties.
Revenue in Q2 2023 was $5.5 million, up from $3.5 million in Q2 2022. No revenue in Q2 2023 is
attributed to the new Plomosas mine acquisition.
Mine operating earnings before amortization and depletion in Q2 2023 was $0.90 million,
compared to $0.03 million in Q2 2022.
The net loss in Q2 2023 was $0.9 million compared to net loss of $0.8 million in Q2 2022 The net
loss in the period includes $0.5 million for G&A costs related to the new Plomosas acquisition as
well as one-time costs related to the marketing of the Company's recent non-brokered private
placement.
After investing $2.8 million in exploration expenditures and mining assets during the quarter, the
cash position remained strong at quarter-end with $13.7 million with working capital of $13.3
million.
During the quarter, the Company closed an oversubscribed, non-brokered private placement for an
additional $9.0 million.
The Company has no long-term debt.
Q2 2023 Production Overview
Mill throughput in Q2 2023 was 35,753 tonnes compared to 37,183 tonnes in Q2 2022.
Silver production during the period increased by 1% to 155,744 oz compared to 154,001 oz in Q2
2022 while contributions from lead and gold saw production increases on a year-over-year basis
of 49% and 383%, respectively.
Revenue per tonne sold was $155.67 in Q2 2023, representing an increase of 63% over the same
period in 2022 of $95.44.
Direct costs per production tonne were $130.67 in Q2 2023, representing an increase of 38% over
Q2 2022 costs of $94.86 per tonne. Much of this increase is due to foreign exchange, with the
balance coming from inflation-related pressures in Mexico.
Exploration Review
At the Royal Mines of Zacualpan, management continues to focus its drill program in areas where it has
seen ongoing success, such as the San Ramon and the Guadalupe Mine. Meanwhile, management is
especially encouraged with developments at the Alacran mine as its elevated gold values could continue
to improve the overall grade for the Zacualpan district operations and as a result, revenue per tonne.
Outlook
With a strong balance sheet, exploration potential at both of the mining districts, encouraging gold
potential as well as the upcoming start-up of the Plomosas high-grade zinc acquisition, management
believes the next 18 months will be transformative for the Company and its investors. These factors
should lead to ongoing improvement in revenues while management expects cost pressures to continue
to slow heading into 2024.
The Company's growth is expected to reflect its strong position as one of just a handful of intermediate
miners offering investors exposure to three distinct verticals across the mining sector, including
exploration, production, and growth.
A recorded conference call reviewing the financial and production results of the quarter ended June 30,
2023 will be available on the Company website on August 28, 2023
at
https://impactsilver.com/media/conference-calls/
.
The information in this news release should be read in conjunction with the Company's Q2 2023
unaudited condensed consolidated interim financial statements and Management's Discussion and
Analysis, available on the Company website at
www.impactsilver.com
and on SEDAR at
www.sedarplus.ca
. All amounts are stated in Canadian dollars unless otherwise specified.
ABOUT IMPACT SILVER
IMPACT Silver Corp. (TSXV: IPT) is a successful intermediate mineral producer and explorer with three
mining projects in Mexico.
Royal Mines of Zacualpan Silver-Gold District
: IMPACT owns 100% of the 211 km
2
Zacualpan
project where four underground silver mines and one open pit mine feed the central 500 tpd Guadalupe
processing plant. To the south, the Capire Project includes a 200 tpd processing pilot plant adjacent to
an open pit silver mine with an NI 43-101 inferred mineral resource of over 4.5 million oz silver, 48 million
lbs zinc and 21 million lbs lead. (see IMPACT news release dated January 18, 2016, for details and QP
statement, and Footnote 1 below for technical report reference) Company engineers are reviewing
Capire for a potential restart of operations to leverage improved commodity prices. Over the past 17
years, IMPACT has developed multiple exploration zones into commercial production and have
produced over 12 million ounces of silver, generating revenue more than $241 million.
Plomosas Zinc-Lead-Silver District:
Plomosas is a high-grade zinc-lead-silver producer with
exceptional exploration upside potential. The Company aims to recommence operations in the near term
followed by plans for expanding operations in 2024. Exploration potential at Plomosas is exceptional
with only 600m of the 6 km-long structure having been explored to date. This is in addition to other
exploration targets on the 3,019-hectare property including untested copper-gold targets with indications
of high-grade material from surface. Regionally, Plomosas lies in the same mineral belt as some of the
largest carbonate replacement deposits in the world.
Additional information about IMPACT and its operations can be found on the Company website at
www.impactsilver.com
. Follow us on Twitter @IMPACT_Silver and LinkedIn at
https://www.linkedin.com/company/impactsilver
.
Qualified Person and NI 43-101 Disclosure
George Gorzynski, P.Eng., is a "Qualified Person" within the meaning of NI 43-101 and has approved
the technical information contained in this news release.
On behalf of IMPACT Silver Corp.
"Frederick W. Davidson"
President & CEO
For more information, please contact:
Jerry Huang
CFO | Investor Relations
(604) 664-7707 or
(778) 887 6489 Direct
Neither 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
release.
Footnotes:
1. Reference: Ristorcelli, S.J. & Gorzynski, G. (2016). Technical Report on Mineral Resources for the Capire Silver-Lead-Zinc Project, Pedro
Ascencio Alquisiras Municipality, Guerrero, Mexico. Prepared for IMPACT Silver Corp. by Mine Development Associates, Reno, Nevada. 82 pages.
Available on
www.sedarplus.ca
.
Forward-Looking and Cautionary Statements
This IMPACT News Release may contain certain "forward-looking" statements and information relating
to IMPACT that is based on the beliefs of IMPACT management, as well as assumptions made by and
information currently available to IMPACT management. Forward-looking information is often, but not
always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "planned",
"expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar
expressions, or describes a "goal", or variation of such words and phrases or state that certain actions,
events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. Such
statements include, but are not limited to, statements regarding the potential for defining and extending
the known mineralization at Plomosas, and plans for drilling and future operations at the Company's
projects.
Such forward-looking information involves known and unknown risks and assumptions, including with
respect to, without limitations, exploration and development risks, expenditure and financing
requirements, title matters, operating hazards, metal prices, political and economic factors, competitive
factors, general economic conditions, relationships with vendors and strategic partners, governmental
regulation and supervision, seasonality, technological change, industry practices, and one-time events.
Should any one or more risks or uncertainties materialize or change, or should any underlying
assumptions prove incorrect, actual results and forward-looking statements may vary materially from
those described herein. IMPACT does not assume the obligation to update any forward-looking
statement.
The Company's decision to place a mine into production, expand a mine, make other production related
decisions or otherwise carry out mining and processing operations, is largely based on internal non-
public Company data and reports based on exploration, development and mining work by the
Company's geologists and engineers. The results of this work are evident in the discovery and building
of multiple mines for the Company and in the track record of mineral production and financial returns of
the Company since 2006. Under NI 43-101 the Company is required to disclose that it has not based its
production decisions on NI 43-101 compliant mineral resource or reserve estimates, preliminary
economic assessments or feasibility studies, and historically such projects have increased uncertainty
and risk of failure.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/178451