Telson Mining Corporation Declares Commercial Production at its Campo
Telson Mining Corporation
TSX.V: TSN OTCBB: SOHFF
Frankfurt: TSGN.F
Shares Issued: 130,061,745
Page 1 of 4
Telson Mining Corporation Declares Commercial Production at its Campo
Morado Mine as of May 15, 2018, and Generates US$7.7M Cash Flow in
Final Month and a Half (April 1 to May 15, 2018) of pre-production
Vancouver, British Columbia, May 23rd, 2018
Telson Mining Corporation (“Telson” or the “Company”) (TSX Venture – TSN.V) is extremely pleased to
announce the start of commercial production at its 100% owned Campo Morado Mine ("Campo Morado" or
the "Project") located in Guerrero State, Mexico , with over 60 days of operational steady state production at
75% of management’s targeted mill capacity of 2,500 tonnes per day , achieving zinc recoveries and
concentrate grades within management’s expectations.
José Antonio Berlanga, Director and CEO , states: "Achieving commercial production at Campo Morado is a
major milestone for Telson. When we commenced pre -production activities in October 2017, we provided
guidance that we expected to declare commercial production in Q3, 2018. To do so mid Q2, a full 3 months
ahead of schedule , is a testament to the tremendous skill and expertise of our mining team and the hard
work of our employees. We would like to thank all the stakeholders, especially the local communities that
have su pported us during this restart. We have successfully implemented a new bulk mining method at
Campo Morado (sub level caving rather than room and pillar mining) and in April 2018 we transitioned from
processing development mineralized material to mining mineralized material within one area of the El Largo
Zone. As a result , our grades, recoveries and cash flows improve d dramatically from Q1. We generated
approximately US$7.7M in cash flow during the three months of Q1, and increased to US$5.2M in April alone,
which based on costs of approximately US$3.5M resulted in net cash flow for the month of US$1.7M. For the
first time in Telson’s history we will now start booking revenues. Our goal at Campo Morado is to increase
throughput at the mill to 2,500 tonnes per day by Q3/Q4. We are also investigating new technologies to
improve precious metals recoveries.”
Campo Morado Production Milestones
• Mill processed 112,480.9 Tonnes of mineralized material during the past 60 operational days at an
average daily rate of 1,875 tonnes per day.
• Average Zinc recoveries of approximately 73% obtained during the past 60 operational days.
• Zinc concentrate average grade of approximately 44% zinc, 404 g silver/tonne and 1.42g gold/ tonne
achieved during the past 60 operational days.
• Bulk underground mining methods underway after extensive development phase to allow
production rate increase towards planned 2,500 tonnes per day.
Telson Mining Corporation
TSX.V: TSN OTCBB: SOHFF
Frankfurt: TSGN.F
Shares Issued: 130,061,745
Page 2 of 4
• Highlights of pre-production since reporting on 1st quarter ending March 31st, 2018 (see News
Release dated April 18, 2018) to start of commercial production May 15, 2018 (45-day period) as
follows:
o 84,588.8 tonnes processed through milling facility at an average daily rate of 1,900
tonnes/day.
o Produced 6,708.8 tonnes of zinc concentrate with average grades for April (4,635.5 tonnes)
of 43.82% Zn, 2.95% Pb, 373 g/t Ag, 1.31 g/t Au and for first 15 days of May (2,073.3 tonnes)
44.93% Zn, 2.48% Pb, 444 g/t Ag, 1.42 g/t Au.
o Produced 1065.8 tonnes of lead concentrate with average grades for April (633.4 tonnes) of
37.22% Pb, 9.12% Zn, 859 g/t Ag, 7.51 g/t Au and for first 15 days of May (432.4 tonnes)
27.7% Pb, 9.33% Zn, 713 g/t Ag, 6.17 g/t Au.
o Recoveries of approximately 73% zinc, 31% lead, 31% silver and 20% gold.
o Delivered 5,631 tonnes of zinc concentrate and 1027 tonnes of lead concentrate to buyer.
o Concentrate pre-production April 1 – May 15, 2018, management’s estimated 100%
concentrate sale value for 45 days ending May 15, 2018 (start of commercial production) –
US $7.7 million.
▪ April 1 – 30th – US $5.2 million
▪ May 1 – 15th – US $2.5 million
Note: Shipped concentrates are paid at 90% estimated metal content less deductions upon delivery to Trafigura
warehouse in Manzanillo. The estimated 100% cash selling price is subject to minor changes once final assaying
results are agreed to by the Company and Trafigura at which time the final approximate 10% is paid.
Cautionary note on non -IFRS (international financial reporting standards) performance measures related to cash
sales of concentrates and direct site operation costs as outlined above.
Readers should be cautioned that cash sales shou ld not be equated with revenues . Any proceeds from the
sale of concentrates during preproduction are considered under IFRS to be applied as an offset to development costs
and not counted as revenues on Telson’s income statement. As Telson has now declared commercial production at
Campo Morado, proceeds from concentrate sales from May 15, 2018 forward will be reflected as revenues on its
income statement. Telson is not, during the pre -production stage, able to disclose the costs/expenses associated
with generating such cash sales or provide guidance on profitability (if any) , however, Telson intends to commence
reporting on a quarterly basis commencing Q2 2018, now that it has declared commercial production at Campo
Morado.
This news release refers to total direct site costs, which are non-IFRS performance measures. The Company believes
that these measures, in addition to conventional measures prepared in accordance with IFRS, provide investors an
improved ability to evaluate the underlying performance of th e Company. The non-IFRS measures are 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. These measures do not have any standardized meaning prescribed
under IFRS and therefore may not be comparable with other issuers.
Direct site costs - Telson is reporting direct site costs on per tonne of mineral processed. Sale proceeds reported are
from preproduction during the mine ’s commissioning period. The Company believes that, in addition to
Telson Mining Corporation
TSX.V: TSN OTCBB: SOHFF
Frankfurt: TSGN.F
Shares Issued: 130,061,745
Page 3 of 4
conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the
Company's performance and ability to generate o perating earnings and cash flow from its mining operations.
Management also uses this metric as an important tool to monitor operating performance. Direct site costs are
calculated using costs such as costs incurred in mining, processing and site administration divided by total tonnages
processed. Costs are exclusive of depreciation and other non -cash items. Other companies may calculate this
measure differently.
About Telson Mining Corporation
Telson Mining Corporation is a Canadian based mining company with two Mexican gold, silver and base
metal mining projects.
Telson is currently in production at its 100% owned Campo Morado Mine in Guerrero, Mexico. Telson
acquired Campo Morado in June 2017, re-commenced mining and processing operations in October 2017
with pre-production from mine development on a trial basis that commenced at an average 1,400 tonnes per
day and has just declared commercial production based on operating for 60 consecutive days at 75% of the
Campo Morado mill’s nameplate capacity of 2,500 tonnes per day.
Telson's Tahuehueto Project, located in north -western Durango State, Mexico is currently in pre -production
at approximately 100 tonnes per day utilizing a toll mill for processing, and has entered a construction phase
with a timeline to be producing on site in its own mineral processing plant capable of milling at least 1,000
tonnes per day in Q1, 2019. Regular metal concentrate delivery and sales are underway from both projects.
Visit: www.telsonmining.com
On behalf of the board of directors
(signed) “Ralph Shearing”
Ralph Shearing, P.Geol, President and Director
Qualified Persons
This press release was prepared under the supervision and review of Ralph Shearing, P.Geol., President and
Director of Telson Resources Inc., a Professional Geologist registered in Alberta as a member of the
professional association APEGA, and a Qualified Person as defined by NI 43-101. Data verification by Mr.
Shearing includes personal inspection of the Campo Morado mine site, reviewing mining facilities, drill core,
underground development and discussing work programs and results with geology and mining personnel.
Cautionary Note Regarding Production Decisions and Forward-Looking Statements
It should be noted that Telson has declare d commercial production at Campo Morado prior to completing a
feasibility study of mineral reserves demonstrating economic and technical viability. Accordingly, readers should be
cautioned that Telson’s production decision has been made without a comprehensive feasibility study of established
reserves such that there is greater risk and uncertainty as to future economic results from the Campo Morado mine
Telson Mining Corporation
TSX.V: TSN OTCBB: SOHFF
Frankfurt: TSGN.F
Shares Issued: 130,061,745
Page 4 of 4
and a higher technical risk of failure than would be the case if a feasibility study was completed and relied upon to
make a production decision. Telson has completed a preliminary economic assessment (“PEA”) mining study on the
Campo Morado mine that provi des a conceptual life of mine plan and a preliminary economic analysis based on
the previously identified mineral resources (see News Release dated November 8, 2017 and April 4,2018). This will
soon be replaced by a pre-feasibility study (“PFS”) that will allow the application of modifying factors to the mineral
resources to allow a portion of them to be converted to mineral reserves.
Statements contained in this news release that are not historical facts are “forward-looking information” or “forward-
looking statements” (collectively, “Forward -Looking Information”) within the meaning of applicable Canadian
securities laws. Forward Looking Information includes, but is not limited to, disclosure regarding possible events,
conditions or financial performance that is based on assumptions about future economic conditions and courses of
action; the timing and costs of future activities on the Company’s properties, such as production rates and increases;
success of exploration, development and bulk sample proces sing activities and timing for processing at its own
mineral processing facility on the Tahuehueto project site. In certain cases, Forward -Looking Information can be
identified by the use of words and phrases such as “plans”, “expects”, “scheduled”, “estimates”, “forecasts”, “intends”,
“anticipates” or variations of such words and phrases. In preparing the Forward -Looking Information in this news
release, the Company has applied several material assumptions, including, but not limited to, that the current
exploration, development, environmental and other objectives concerning the Campo Morado Mine and the
Tahuehueto Project can be achieved, the continuity of the price of gold , zinc, lead and other metals, economic and
political conditions and operations. Forward-Looking Information involves known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievements expres sed or implied by the Forward -Looking
Information. There can be no assurance that Forward -Looking Information will prove to be accurate, as actual
results and future events could differ materially from those anticipated in such statements. Accordingly, rea ders
should not place undue reliance on Forward-Looking Information. Except as required by law, the Company does not
assume any obligation to release publicly any revisions to Forward -Looking Information contained in this news
release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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.
For further information about Telson Mining Corporation, please contact:
Glen Sandwell
Corporate Communications Manager
Tel: +1 (604) 684-8071