ORVANA REPORTS FIRST QUARTER FINANCIAL RESULTS; OPERATIONS POSITIONED TO DELIVER INCREASED GOLD PRODUCTION First Quarter 2017 achievements: Gold production increase of 6% from Q4 2016 to 15,699 ounces, copper production of
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For Immediate Release TSX:ORV
Date: February 7, 2017 #02-2017
ORVANA REPORTS FIRST QUARTER FINANCIAL RESULTS; OPERATIONS
POSITIONED TO DELIVER INCREASED GOLD PRODUCTION
First Quarter 2017 achievements:
Gold production increase of 6% from Q4 2016 to 15,699 ounces, copper production of
3.6 million pounds and silver production of 108,280 ounces
Gold equivalent production of approximately 24,341 ounces
Productivity improvement continues at El Valle and Don Mario Mines and position s
Orvana to deliver higher production going forward
Don Mario carbon -in-leach circuit re -commissioning nearing completion, first
commercial delivery planned February 2017
TORONTO, ONTARIO , February 7, 2017 – Orvana Minerals Corp. (TSX:ORV) (the “Company” or
“Orvana”) announced today financial and operational results for the first quarter of fiscal 2017 (“Q1 2017”).
The Company is also providing financial and operational results for its OroValle (El Valle and Carlés Mines)
operations in norther Spain and for its EMIPA (Don Mario Mine) operations in Bolivia.
The unaudited condensed interim consolidated financial statements for Q1 2017 and Management’s
Discussion and Analysis related thereto are available on SEDAR and on the Company’s website at
www.orvana.com.
Q1 2017 Highlights
The Company’s strategic objectives to increase production at its operations include productivity
enhancements to allow for expected delivery of greater throughput, increased gold recovery and lower
unitary costs. The Company is pleased to report the following positive developments in the firs t quarter as
follows:
El Valle – Productivity improvements:
o In December 2016, El Valle reached nameplate plant capacity of 2,000 tonnes per day. This
achievement represents an important milestone for E l Valle on the path to increases in gold
production and planned lower unitary costs by end of fiscal 2017.
o Development and backfill rates continued to improve during the first quarter by 7% and 27%,
respectively, compared with the fourth quarter of fiscal 2016 , allowing for increased flexibility
in the mine plan.
Don Mario – CIL re-commissioning:
o The re-commissioning process is nearing its completion with successful production of initial
gold-silver doré bar s. The focus is on adjustments to reagent mix and residence time in
order to achieve targeted gold rec overy of 80%. First commercial delivery is expected later
in February.
o Total capital costs are expected to be within the Company’s capital cost estimate of $6.4
million +/-15%.
o Don Mario has stockpiled higher gold grade material from the Lower Mineralized Zone for
processing in the fully re-commissioned CIL circuit in order to capitalize on forecasted higher
gold recovery.
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o Repayment of the associated project financing with Banco BISA S.A. (the “BISA Loan”)
began in December 2016.
“We are pleased with the pr ogress made at both El Valle and Don Mario in Q1 in achieving some of our
planned objectives for this year ,” said Jim Gilbert, Chairman and CEO of Orvana. “At El Valle Mine we still
have a lot of work to do with our primary focus on improving ore grade delivered to the processing plant ,
through improved oxide ore production, while maintaining throughput of 2,000 tonnes per day. Th ese are the
critical actions required that will allow El Valle Mine to turn around its disappointing financial performance in
Q1 and deliver the unitary cost improvements that we are aiming for by the end of fiscal 2017. At Don Mario
Mine, we have substantially completed the re-commissioning of the CIL plant and expect to meet our
objective of achieving higher gold recovery and reduced unitary costs in the second half of the current fiscal
year.”
Strategy and Outlook
The Company’s most important objectives through fiscal 2017 and beyond are to safely increase productivity
rates at both its operations and to extend the mine life of Don Mario Mine beyond fiscal 2018.
El Valle:
At El Valle, the Company’s current objective is to increase mined grades while sustaining current ore
volumes through the plant. The Company plans to execute on the following:
o Ongoing development to increase access to higher grade o xide zones in El Valle Mine,
targeting improved oxide production in the second half of fiscal 2017.
o Increasing production from the Carlés Mine, targeting a significant ramp -up beginning in the
third quarter of fiscal 2017. The Company extended its Carlés project timeframe to the end
of fiscal 2017 due to a permitting delay.
o Increasing access to ore fronts will allow El Valle Mine greater flexibility in its mining
activities and therefore greater ability to deliver planned ore volumes to sustain its objective
of 2,000 tonnes per day going forward.
o Continuing improvement and maintenance of targeted backfill and development rates.
o De-risking the mine plan, moving away from transition zones in which poor ground
conditions were experienced through fiscal 2016.
Don Mario:
At Don Mario, the Company is nearing completion of the re -commissioning of the CIL circuit. Once
operational, average gold recoveries are expected to increase to 80% compared to an average of
approximately 55% using the current flotation process.
Once re-commissioned, the CIL circuit will produce a gold -silver doré product in lieu of curre nt gold
gravity concentrate prod uction, lowering deduction costs at Don Mario. Efforts are underway to
finalize a doré sales agreement, targeting first commercial delivery later in February.
The CIL circuit will support the Company’s objective of extending mine life at Don Mario , as the
enhanced processing capabilities of the CIL circuit facilitate other known opportunities, including
mining from the Cerro Felix and Las Tojas areas close to the existing mine , as well as tailings
reprocessing.
The Company is also expecting to increase mine life at Don Mario through the processing of 2.2
million tonnes of oxide stockpiles with an average estimated gold grade of 1.84 g/t. Oxide stockpile
studies are underway and are expected to return results during the second quarter of fiscal 2017.
While maintaining its focus on optimizing current operations, the Company will also evaluate strategic
alternatives that could accelerate the growth of the Company.
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FY 2017 Production and Cost Guidance
Q1 2017
Actual
FY 2017
Guidance
El Valle Mine Production
Gold (oz) 10,723 50,000 – 55,000
Copper (million lbs) 0.8 6.0 – 6.5
Silver (oz) 29,321 170,000 – 200,000
Don Mario Mine Production
Gold (oz) 4,976 35,000 – 40,000
Copper (million lbs) 2.7 7.0 – 7.5
Silver (oz) 78,959 130,000 – 150,000
Total Production
Gold (oz) 15,699 85,000 – 95,000
Copper (million lbs) 3.6 13.0 – 14.0
Silver (oz) 108,280 300,000 – 350,000
Total capital expenditures $7,719 $27,000 – $30,000
Cash operating costs (by-product) ($/oz) gold (1) $1,258 $1,050 – $1,150
All-in sustaining costs (by-product) ($/oz) gold (1) $1,732 $1,300 – $1,400
(1) FY2017 guidance assumptions for COC and AISC include by -product commodity prices of $2.00 per pound of copper and
$18.00 per ounce of silver and an average Euro to US Dollar exchange of 1.12.
Selected Operational and Financial Information
Q1 2017 Q4 2016 Q1 2016 FY 2016
Operating Performance
Gold
Production (oz) 15,699 14,842 17,789 65,785
Sales (oz) 14,060 14,705 15,955 61,816
Copper
Production (‘000 lbs) 3,588 3,630 3,951 14,735
Sales (‘000 lbs) 3,598 3,296 3,814 13,367
Silver
Production (oz) 108,280 122,589 171,664 525,934
Sales (oz) 128,217 96,520 160,565 469,847
Financial Performance (in 000’s, except per share amounts)
Revenue $23,458 $24,044 $22,497 $93,850
Mining costs $24,356 $22,884 $20,806 $84,544
Gross margin ($6,853) ($3,599) ($3,869) ($7,883)
Net loss ($8,154) ($1,528) ($3,076) ($8,455)
Net loss per share (basic/diluted) ($0.06) ($0.01) ($0.02) ($0.06)
Ending cash and cash equivalents $9,521 $18,939 $17,535 $18,939
Capital expenditures (2) $7,719 $5,394 $3,716 $14,977
Cash operating costs (by-product) ($/oz) gold (1) $1,258 $1,206 $1,004 $1,082
All-in sustaining costs (by-product) ($/oz) gold (1)(2) $1,732 $1,699 $1,316 $1,428
(1) Cash operating costs (“COC”) and all-in sustaining costs (“AISC”) are non-IFRS performance measures.
(2) These amounts are presented in the consolidated cash flows in the 2016 Financials on a cash basis. Each reported period
excludes capital expenditures incurred in the period which will be paid in subsequent periods and includes capital
expenditures incurred in prior periods and paid for in the applicable reporting period. The calculation of AISC includes capex
incurred (paid and unpaid) during the period.
About Orvana
Orvana is a multi -mine gold and copper producer . Orvana’s operating assets consist of the producing gold-
copper-silver El Valle and Carlés mines in northern Spain and the producing gold -copper-silver Don Mario
mine in Bolivia. Additional information is available at Orvana’s website (www.orvana.com).
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For further information please contact:
Jeff Hillis
Chief Financial Officer
T (416) 369-6275
Cautionary Statements - Forward-Looking Information
Certain statements in this information constitute forward -looking statements or forward -looking information within the
meaning of applicable securities laws (“forward-looking statements”). Any statements that express or involve discussions
with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, potentials, future events or
performance (often, but not alw ays, using words or phrases such as “believes”, “expects”, “plans”, “estimates” or
“intends” or stating that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “are projected to” b e
taken or achieved) are not statements of historical fact, but are forward-looking statements.
The forward -looking statements herein relate to, among other things, Orvana’s ability to achieve improvement in free
cash flow; the potential to extend the mine life of El Valle and Don Mario beyond their cur rent life-of-mine estimates;
Orvana’s ability to optimize its assets to deliver shareholder value; the Company’s ability to optimize productivity at Don
Mario and El Valle; estimates of future production, operating costs and capital expenditures; mineral r esource and
reserve estimates; statements and information regarding future feasibility studies and their results; future transactions;
future metal prices; the ability to achieve additional growth and geographic diversification; future financial performanc e,
including the ability to increase cash flow and profits; future financing requirements; and mine development plans.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered
reasonable by the Comp any as of the date of such statements, are inherently subject to significant business, economic
and competitive uncertainties and contingencies. The estimates and assumptions of the Company contained or
incorporated by reference in this information, which may prove to be incorrect, include, but are not limited to, the various
assumptions set forth herein and in Orvana’s most recently filed Management’s Discussion & Analysis and Annual
Information Form in respect of the Company’s most recently completed fisc al year (the “Company Disclosures”) or as
otherwise expressly incorporated herein by reference as well as : there being no significant disruptions affecting
operations, whether due to labour disruptions, supply disruptions, power disruptions, damage to equi pment or otherwise;
permitting, development, operations, expansion and acquisitions at El Valle and Don Mario being consistent with the
Company’s current expectations; political developments in any jurisdiction in which the Company operates being
consistent with its current expectations; certain price assumptions for gold, copper and silver; prices for key supplies
being approximately consistent with current levels; production and cost of sales forecasts meeting expectations; the
accuracy of the Company’s c urrent mineral reserve and mineral resource estimates; and labour and materials costs
increasing on a basis consistent with Orvana’s current expectations.
A variety of inherent risks, uncertainties and factors, many of which are beyond the Company’s contro l, affect the
operations, performance and results of the Company and its business, and could cause actual events or results to differ
materially from estimated or anticipated events or results expressed or implied by forward looking statements. Some of
these risks, uncertainties and factors include fluctuations in the price of gold, silver and copper; the need to recalculate
estimates of resources based on actual production experience; the failure to achieve production estimates; variations in
the grade of ore mined; variations in the cost of operations; the availability of qualified personnel; the Company’s ability
to obtain and maintain all necessary regulatory approvals and licenses; the Company’s ability to use cyanide in its
mining operations; risks gen erally associated with mineral exploration and development, including the Company’s ability
to continue to operate the El Valle and/or Don Mario and/or ability to resume long-term operations at Carlés Mine; the
Company’s ability to acquire and develop mineral properties and to successfully integrate such acquisitions; the
Company’s ability to execute on its strategy; the Company’s ability to obtain financing when required on terms t hat are
acceptable to the Company; challenges to the Company’s interests in its property and mineral rights; current, pending
and proposed legislative or regulatory developments or changes in political, social or economic conditions in the
countries in whi ch the Company operates; general economic conditions worldwide; and the risks identified in the
Company’s Disclosures under the heading “Risks and Uncertainties”. This list is not exhaustive of the factors that may
affect any of the Company’s forward -looking statements and reference should also be made to the Company’s
Disclosures for a description of additional risk factors.
Any forward-looking statements made in this information with respect to the anticipated development and exploration of
the Company’s mineral projects are intended to provide an overview of management’s expectations with respect to
certain future activities of the Company and may not be appropriate for other purposes.
Forward-looking statements are based on management’s current plans, e stimates, projections, beliefs and opinions and,
except as required by law, the Company does not undertake any obligation to update forward -looking statements should
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assumptions related to these plans, estimates, projections, beliefs and opinions change. R eaders are cautioned not to
put undue reliance on forward-looking statements.
The forward -looking statements made in this information are intended to provide an overview of management’s
expectations with respect to certain future operating activities of th e Company and may not be appropriate for other
purposes.
Cautionary Notes to Investors – Reserve and Resource Estimates
In accordance with applicable Canadian securities regulatory requirements, all mineral reserve and mineral resource
estimates of the Company disclosed in this AIF have been prepared in accordance with NI 43 -101 (as defined below),
classified in accordance with Canadian Institute of Mining Metallurgy and Petroleum's "CIM Standards on Mineral
Resources and Reserves Definitions and Guidelines" (the "CIM Guidelines").
Pursuant to the CIM Guidelines, mineral resources have a higher degree of uncertainty than mineral reserves as to their
existence as well as their economic and legal feasibility. Inferred mineral resources, when compared with measured or
indicated mineral resources, have the least certainty as to their existence, and it cannot be assumed that all or any part
of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued
exploration. Pursuant to NI 43 -101, inferred mineral resources may not form the basis of any economic analysis,
including any feasibility study. Accordingly, readers are cautioned not to assume that all or any part of a mineral resource
exists, will ever be converted into a mineral reserve, or is or will ever be economically or legally mineable or recovered.