Orvana Reports FY2021 Results & FY2022 Guidance and Annouces a New €15 Million Syndicated Loan
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For Immediate Release TSX:ORV
Date: November 30, 2021 #19-2021
ORVANA REPORTS FY2021 RESULTS & FY2022 GUIDANCE
AND ANNOUCES A NEW €15 MILLION SYNDICATED LOAN
All Amounts in US Dollars Unless Otherwise Stated
FY2021 Consolidated Financial Highlights:
• $106 M Revenue
• $20 M EBITDA
• $14 M CAPEX
• $11 M EoY Unrestricted Cash
FY2021 Orovalle Highlights:
• 63 K Au Oz Eq produced (47.4 K Au Oz, 6.3 M Cu lb and 166 K Ag oz)
• COC at $1,043 and AISC at $1,376
FY2022 Orovalle Guidance:
• Gold: 48K – 53 K Au Oz
• Copper: 5.8 M – 6.5 M Cu lb
• COC and AISC: $1,050 - $1,150 and $1,550 – $1,700
• CAPEX: $22 M – $25 M
Juan Gavidia, CEO of Orvana Minerals Corp. stated: “ We are pleased to close fiscal 2021 with a strong
operational and financial performance. EBITDA of USD20M allowed the Company to internally fund exploration
and development strategies in Spain, Argentina and Bolivia. Looking ahead to fiscal 2022, continued cash flow
generation coupled with the new cost-competitive financing in Spain, will allow us to successfully advance the
“Organic Growth Strategy” for all of our three units”.
TORONTO, ONTARIO, November 30, 2021 – Orvana Minerals Corp. (TSX:ORV) (the “Company” or
“Orvana”) announced today financial and operational results for the fourth quarter and for the fiscal year ended
September 30, 2021 (“FY2021”), and the approval of a €15 million syndicated loan in Spain.
The audited consolidated financial statements for FY2021 and Management’s Discussion and Analysis related
thereto are available on SEDAR and on the Company’s website at www.orvana.com.
FY2021 Highlights:
• Orovalle Operation, Spain:
- Consolidated production of 63,108 gold equivalent ounces (47,413 gold ounces, 6.3 million copper
pounds and 166,427 silver ounces).
- Metal production was slightly below fiscal 2021 Guidance mainly due to the mid-August Plant stoppage
caused by the assessment of corrective measures to the tailings pumping circuits, which was impacted
by the failure of a legacy open- pit wall. Underground mining continued operating throughout the plant
stoppage, generating a stockpile that will be the basis to catch-up fiscal 2021 delayed production into
fiscal 2022.
- Gold production was 47,413 ounces, 7% lower than previous year. Production decrease was due to
10% lower head grade, partially off -set by 3% higher throughput. Gold head grade was 2.45 g/t,
compared to 2.71 g/t reported last year.
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- Copper production was 6.3 million pounds, 12% higher than previous year. Production increase was
due to 3%, 6% and 2% higher throughput, head grade and recoveries respectively. Copper head grade
w
as 0.53%, compared to 0.50% reported last year.
- The Company drilled 28,349 meters in fiscal 2021 (23,553 meters were drilled in El Valle Boinás, 2,738
m
eters in Carlés, 1,017 meters in Lidia and 1,041 meters in Ortosa-Godán).
• EM
IPA Operation, Bolivia:
- Don Mario operation continues in care and maintenance (“C&M”), transitioning to the Oxides Stockpile
Project (plant overhaul to treat a 2 million tones stockpile accumulated from previous years of mining
activity).
- Critical areas of the C&M program in place are: site security, environmental control, power generators
maintenance, preventive maintenance of process plant, preventive maintenance of mine equipment
and maintenance of camp facilities.
- The Oxides Stockpile Project (“OSP”) quality assurance (metallurgical) testing has been completed in
the second half of November 2021 with very satisfactory results, summarized below:
Metal recoveries (*)
Gold 88.96%
Copper 70.27%
Silver 70.31%
R
eagents
Consumption (*)
Sulphuric Acid 75.09 kg/t
Sodium Cyanide 3.51 Kg/t
Lime 33.77 Kg/t
Hydrogen Peroxide 6.81 Kg/t
(*) Quality Control: The metallurgical testing has been performed by the EMIPA team with
support of external metallurgical consultants, under the supervision of Rudyard Walter Torres
de la Cruz, a Professional Chemical Engineer, registered in Perú with code 123750, and
independent of the Company. The reported work has been completed using industry standard
procedures.
• Taguas Project, Argentina:
- Completion of 4,689m of diamond drilling in the Taguas Project between February and April 2021.
- On July 28, 2021 the Company filed the updated Taguas Project new Mineral Resource Estimat e
(
effective June 30, 2021), in compliance with Canadian National Instrument 43-101. The updat ed
M
ineral Resource Estimate includes both oxide and sulphide ore of three areas: Cerro Taguas, Cerro
Silla Sur and Cerro Campamento, and is the result of drilling programs completed between 1985 and
2021. The June 30, 2021 Mineral Resource Estimate highlights are:
133.6Mt Inferred Resource at 0.60 g/t gold equivalent.
947K AuEq Oz, 55.5Mt of total resource, are low -cost oxides to be prioritized for full
development.
1,649K AuEq Oz, 78.2Mt of total resource, are sulfides.
Cautionary Statement – Mineral resources are not mineral reserves, and do not have demonstrated economic viability. The
mineral resource for the Taguas Project was prepared in compliance with National Instrument 43-101 and CIM guidelines, as set
out in the Independent Technical Report NI 43 -101 on the Taguas Project, San Juan, Argentina, dated June 30, 2021 and
effective as of June 30, 2021 (the “2021 Report”). A copy of the 2021 Report is posted under the Company’s profile on
www.sedar.com. These mineral resources were estimated using a gold price of $1,700 per ounce, copper price of $3.25 per
pound and silver price of $20 per ounce, prices of which were used in the 2021 Report.
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Selected Consolidated Operational and Financial Information
Q4 2021 Q3 2021 Q4 2020 FY2021 FY2020
Operating Performance
Gold
Grade (g/t) 2.18 2.60 2.70 2.45 2.56
Recovery (%) 91.2 91.5 93.3 91.9 93.1
Production (oz) 8,621 13,879 13,422 47,413 53,421
Sales (oz) 11,500 14,520 14,784 46,628 55,344
Average realized price / oz $1,791 $1,798 $1,891 $1,819 $1,647
Copper
Grade (%) 0.52 0.48 0.58 0.53 0.45
Recovery (%) 80.9 84.6 83.4 82.3 80.8
Production (‘000 lbs) 1,253 1,630 1,780 6,283 5,611
Sales (‘000 lbs) 1,410 1,784 1,971 6,315 5,512
Average realized price / lb $4.24 $4.36 $2.93 $3.91 $2.68
Financial Performance (in 000’s, except per share amounts)
Revenue $25,220 $32,800 $32,586 $105,513 $101,994
Mining costs $19,792 $22,516 $22,392 $74,845 $82,240
Gross margin $151 $5,141 $3,290 $13,301 ($2,114)
Net income (loss) ($1,336) ($877) $8,640 ($1,112) ($1,592)
Net income (loss) per share (basic/diluted) ($0.01) ($0.01) $0.06 ($0.01) ($0.01)
EBITDA (1) $3,967 $5,985 $7,255 $19,917 $9,544
Operating cash flows before non-cash working
capital changes $2,623 $7,600 $4,304 $21,163 $8,959
Operating cash flows $2,983 $9,097 $13,392 $16,573 $11,435
Free Cash Flow (1) ($432) $2,802 $602 $7,008 $278
Ending cash and cash equivalents $11,327 $15,936 $15,572 $11,327 $15,572
Capital expenditures (2) $3,055 $4,798 $3,702 $14,155 $8,681
Cash operating costs (by-product) ($/oz) gold (1)(3) $1,320 $1,079 $1,241 $1,152 $1,278
All-in sustaining costs (by-product) ($/oz) gold
(1)(2)(3) $1,637 $1,528 $1,609 $1,583 $1,582
All-in costs (by-product) ($/oz) gold (1)(2)(3) $1,725 $1,661 $1,643 $1,694 $1,614
(1) Earnings before interest, taxes, depreciation and amortization (“EBITDA”), free cash flow, cash operating costs, all-in sustaining
costs and all -in costs are non -IFRS performance measures. For further information and a detailed reconciliation of these
measures not presented elsewhere, please see the “Other Information - Non-IFRS Measures” section of this MD&A.
(2) These amounts are presented in the consolidated cash flows in the Q3 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. See the “ Cash Flows, Commitments and Liquidity - Capital
Expenditures” section of this MD&A. The calculation of all-in sustaining costs and all-in costs includes capex incurred (paid and
unpaid) during the period.
(3) Unitary costs do not include one-time costs nor one-time severance charges.
Fiscal 2022 (“FY2022”) Outlook:
The Company continues to implement comprehensive and proactive measures to respond to the COVID -19
pandemic; and continues to work closely with local governments and authorities to ensure that proper protocols
are followed during the ongoing COVID -19 crisis. The overall impact on each of our sites will depend on the
progression of the pandemic and measures in place for preventing transmission.
The Company continues to pursue its objectives of optimizing production, lowering unitary cash costs,
maximizing free cash flow, and extending the life- of-mine of its operations under a long term operational
strategy. Main objectives per unit are:
- Orovalle: Strong cash flow generation based on stable production plan. Continue exploration drive to
keep replenishing, and expanding, the resource base. Renew 5 -Year Life of Mine Plan on an annual
basis, as has been the case for the last five years.
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- Orvana Argentina: Complete a new PEA on the Taguas Project in Q1 FY2022. Start Infill Drilling
Program in Q1 FY2022, required to develop Pre-Feasibility Study.
- EMIPA: Determine the viability of the OSP in fiscal 2022. Subject to approval and financing,
construction is planned for fiscal 2023; with a 3-year production life between 2024 and 2026. Scoping
studies for a subsequent project regarding reprocessing tailings will be underway in fiscal 2022. A
comprehensive exploration program that started in fiscal 2021 is planned to continue throughout fiscal
2022, with non-drilling field and cabinet work.
FY2022 Guidance:
The Company is pleased to provide FY2021 results and FY2022 guidance for its operating unit in Spain:
Orovalle
FY 2021
Actual
FY 2022
Guidance (1)
Metal Production
Gold (oz) 47,413 48,000 – 53,000
Copper (million lbs) 6.3 5.8 – 6.5
Capital Expenditures (thousands) $12,803 $22,000 – $25,000
Cash operating costs (by-product) ($/oz) gold (1) $1,043 $1,050 – $1,150
All-in sustaining costs (by-product) ($/oz) gold (1) $1,376 $1,550 – $1,700
(1) Fiscal 2022 guidance assumptions for COC and AISC include by -product commodity prices of $4.00 per pound of copper
and an average Euro to US Dollar exchange of 1.17.
New €15 Million Syndicated Loan
Orvana has been evaluating alternatives to fund the development of the Taguas Project in Argentina and
structural capital expenditures in Spain. Subsequent to September 30, 2021 the Company, through its wholly -
owned subsidiaries Orovalle Minerals S.L. and Orvana Minerals Iberia, S.L. (“Iberia”), has obtained approval
from two Spain-based banks to access a syndicated loan (the “Syndicated Loan”) for €15 million.
The closing of the Syndicated Loan is subject to the execution of applicable legal documentation, and is
expected by December 2021. Once closed, the Syndicated Loan will provide the Company with improved
financial metrics to fulfill its growth strategy.
The Syndicated Loan bears a variable interest rate of Euribor plus 2.5%, with semi -annual repayments over a
four-year term, and is subject to a 1.5% commission fee. Orvana’s obligations are secured by the pledge of
Orovalle and Iberia’s shares. Amongst the obligations, the ratio net finance debt to EBITDA calculated based
on the aggregated financial information of Orovalle and Iberia, must be, throughout the life of the financing, less
than 3.5.
ABOUT ORVANA - Orvana is a multi -mine gold -copper-silver company. Orvana’s assets consist of the
producing El Valle and Carlés gold-copper-silver mines in northern Spain, the Don Mario gold-silver property in
Bolivia, currently in care and maintenance, and the Taguas property located in Argentina. Additional information
is available at Orvana’s website (www.orvana.com).
For further information please contact:
Nuria Menéndez
Chief Financial Officer
Cautionary Statements - Forward-Looking Information
Certain statements in this presentation 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 wi th respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions, potentials, future events or performance (often, but not always, using
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words or phrases such as “believes”, “expects”, “plans”, “estimates” or “intends” or stati ng that certain actions, events or results “may”,
“could”, “would”, “might”, “will” or “are projected to” be 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 ability
to maintain expected mining rates and expected throughput rates at El Valle Plant; the potential to extend the mine life of El Valle and Don
Mario beyond their current l ife-of-mine estimates including specifically, but not limited to, in the case of Don Mario, the processing of the
mineral stockpiles and the reprocessing of the tailings material; Orvana’s ability to optimize its assets to deliver sharehol der value; the
Company’s ability to optimize productivity at Don Mario and El Valle; estimates of future production, operating costs and capital
expenditures; mineral resource 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; the potential for discovery of
additional mineral resources; future financial performance, including the ability to increase cash fl ow 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
Company as of the date of such statements, are i nherently subject to significant business, economic and competitive uncertainties and
contingencies, which includes, without limitation, as particularly set out in the notes accompanying the Company’s most recently filed
financial statements. 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 of the Company’s most recently completed fiscal year , and the latest filed Annual Information Form
(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 equipment 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 current mineral reserve and mineral resource estimates;
labour and materials costs increasing on a basis consistent with Orvana’s current expectations; the availability of necessary funds to
execute the Company’s plan; there will be no material change to the results of the preliminary economic assessment, including but not
limited to the mineral resource estimation, conceptual mine plan and operations, internal rate of return, sensitivities, taxes, net present
value, potential recoveries, design parameters, operating costs, capital costs, production data and economic potential; the timing and costs
for production decisions; permitting timelines and requirem ents are achieved in a timely manner ; exploration and planned exploration
programs are sufficiently funded and executed in a timely manner; timing for completion of a feasibility study; timing for first gold production;
processing the stockpile at El Valle in connection with the metal production catch-up program; identifying additional resources beyond the
replenishment of annual depletion rates at El Valle for the extension of mine life; issuing an expanded resource PEA for Taguas in a timely
manner; completion of the infill drilling program at Taguas; making a decision on the oxides stockpile at Don Mario in a timely manner; and
the Company's general objectives and strategies.
A variety of inherent risks, uncertainties and factors, many of which are beyond the Company’s control, affect the operations, performance
and results of the Company and its business, and could cause actual events or results to differ materially from estim ated or anticipated
events or results expressed or implied by forward looking statements. Some of these risks, uncertainties and factors include: the potential
impact of the COVID- 19 on the Company’s business and operations, including: our ability to conti nue operations; our ability to manage
challenges presented by COVID-19; the accounting treatment of COVID-19 related matters; Orvana’s ability to prevent and/or mitigate the
impact of COVID-19 and other infectious diseases at or near our mines; our ability to support the sustainability of our business including
through the development of crisis management plans, increasing stock levels for key supplies, monitoring of guidance from the medical
community, and engagement with local communities and authorities; 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 general ly associated
with mineral exploration and development, including the Company’s ability to continue to operate the El Valle and/or ability to resume long-
term operations at the Carlés Mine; the Company’s ability to successfully implement a sulphidization circuit and ancillary facilities to process
the current oxides stockpiles at Don Mario; the Company’s ability to successfully carry out development plans at Taguas; sufficient funding
to carry out development plans at Taguas and to process the oxides stockpiles at Don Mario; 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 Com pany’s ability
to obtain financing when required on terms that 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 which the Company operates; general economic condi tions worldwide; current and future environmental matters; and
the risks identified in the Company’s disclosures. 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 herein 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, estimates, projections, beliefs and
opinions and, except as required by law, the Company does not undertake any obligation to update forward -looking statements should
assumptions related to these plans, estimates, projections, beliefs and opinions change. Readers 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 the Company and may not be appropriate for other
purposes.