ORVANA REPORTS IMPROVED THIRD QUARTER FINANCIAL RESULTS ON RECORD QUARTERLY GOLD PRODUCTION Third Quarter 2017 achievements: Record quarterly gold production of 26,414 ounces, increase of 65% from Q2 2016; Gold equivalent production of approximately 35,292 ounces during Q3 2017;
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For Immediate Release TSX:ORV
Date: August 10, 2017 #09-2017
ORVANA REPORTS IMPROVED THIRD QUARTER FINANCIAL RESULTS ON
RECORD QUARTERLY GOLD PRODUCTION
Third Quarter 2017 achievements:
Record quarterly gold production of 26,414 ounces, increase of 65% from Q2 2016;
Gold equivalent production of approximately 35,292 ounces during Q3 2017;
Revenue increased by $10.7 million to $36.7 million, up 41% compared to Q3 2016;
EBITDA up by $2.3 million compared to Q3 2016;
Cash balance of $18.5 million at June 30, 2017, up from $14.2 million at March 31, 2017;
COC and AISC of $1,032 and $1,199, respectively, in Q3 2016;
On track to meet fiscal 2017 cost and production guidance, including COC and AISC.
TORONTO, ONTARIO, August 10, 2017 – Orvana Minerals Corp. (TSX:ORV) (the “Company” or
“Orvana”) announced today financial and operational results for the third quarter of fiscal 2017 (“Q2 2017”).
The Company is also providing financial and operational results for its El Valle and Carlés Mines (collectively,
“El Valle”) operations in northern Spain and for its Don Mario Mine in Bolivia.
The unaudited condensed interim consolidated fi nancial statements for Q2 2017 and Management’s
Discussion and Analysis related thereto are av ailable on SEDAR and on the Company’s website at
www.orvana.com.
Q3 2017 Highlights
The Company’s strategy to increase production at its operations tar gets productivity enhancements to allow
for delivery of greater throughput, increased gold recovery and reduced unitary costs. The Company is pleased
to report the following positive developments in the third quarter, as follows:
El Valle – Further productivity improvements delivered higher gold and copper production:
o Production from higher gold grade oxide area s of El Valle in Q3 2017 increased to 42,243
tonnes in Q3 2017, or 44%, compared with Q2 2017. Production from the Carlés Mine
improved to 39,115 tonnes in Q3 2017, or 35%, compared with Q2 2017.
o As a result of the improvement in mining pr oductivity and increase in mill throughput rates,
gold and copper production increased by 15% and 24%, respectively, compared to Q2 2017.
Don Mario – CIL production surpassed targets:
o During the first full quarter of commercial produ ction from the CIL circuit, gold production at
Don Mario increased to 12,709 ounces, up 48% compared with the second quarter of fiscal
2017. Gold recoveries averaged 89.3% over Q3 2017, exceeding the Company’s targeted
average gold recovery of 80%.
o Copper and silver production increased by 45% and 29%, respectively, compared to Q2 2017,
as a result of improved recoveries and mill throughput.
Realized reductions in unitary costs and improved financial performance:
o Enabled by the productivity incr eases above, consolidated all-in sustaining costs fell to $1,199
per ounce, compared with $1,214 per ounce in the second quarter of fiscal 2017 and $1,311
per ounce in the third quarter of fiscal 2016.
o Revenue increased 16% to $36.7 million in t he third quarter, compared with the second
quarter of fiscal 2017; EBITDA improved by $2.3 million over the same period of fiscal 2016.
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o Consolidated cash balance in creased from $14.2 million at March 31, 2017 to $18.5 million at
June 30, 2017.
“At El Valle, the recent increases to higher grade oxide production have demonstrated the improving flexibility
of the mine and allowed for sustained gold production through the quarter, despite lower than expected grades
from skarn production,” commented Jim Gilbert, Chai rman and CEO. “We look forward to reporting our
continued progress on improving our oxide production at El Valle, targeting further decreases in unitary costs.
With Don Mario also registering higher recoveries and gold production this year, Orvana is on track to meet
the fiscal 2017 guidance laid out at the beginning of the year.”
Strategy and Outlook
The Company’s most important objectives through fiscal 2017 and beyond are to sustainably 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 achieved its objective of a sustained mill throughput rate of 2,000 tpd over
Q3 2017, increasing its gold, copper and silver production by 15%, 24%, and 9%, respectively,
compared to Q2 2017. Next steps include the following:
o Ongoing development to increase access to hi gher grade oxide zones in El Valle Mine, with
the objective of increasing the proportion of oxide material relative to skarn material delivered
to the mill. This is expected to be supported by the gains realized to date in development and
backfill rates, allowing for access to a greater number of oxide stopes, as was partially realized
during Q3 2017.
o Improved mine flexibility and grade control through a significant reduction of the proportion of
inferred material in near-term mine planning.
Don Mario:
The gold recovery results from Q3 2017 have poised Don Mario to realize on known opportunities for
mine life extension, and the Company is working through the following near-term projects:
o A mine plan for Cerro Felix was completed subseq uent to Q3 2017, and pre-stripping activities
are expected to commence in Q1 fiscal 2018. Full production is expected to transition to Cerro
Felix subsequent to the planned depletion of the Lower Mineralized Zone in mid-fiscal 2018.
o Don Mario is also reviewing its options for processing of 2.2 million tonnes of oxide stockpiles
with an average estimated gold grade of 1.84 g/t. The Company has had a successful track
record of processing this material as part of a blended feed into the processing plant during
FY 2016 and FY 2017. Testing results rece ived during FY 2017 have yielded positive
indications, and the Company expects to conclude larger scale tests in the coming months.
o In support of the near-term and long-term mine life extension projects underway at Don Mario,
a substantial tailings storage facility expans ion project has commenced. The Company
expects that this project will allow for suffi cient capacity to support up to an additional three
years of operations bey ond Q2 fiscal 2018. The constructi on will be financed primarily by a
portion of the recently closed $11.3 million in new debt facilities from Banco BISA S.A.
While maintaining its focus on optim izing current operatio ns, the Company will al so evaluate strategic
alternatives that could accelerate the growth of the Company.
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FY 2017 Production and Cost Guidance
YTD 2017
Actual
FY 2017
Guidance
El Valle Production
Gold (oz) 36,345 50,000 – 55,000
Copper (million lbs) 4.2 6.0 – 6.5
Silver (oz) 136,083 170,000 – 200,000
Don Mario Production
Gold (oz) 26,281 35,000 – 40,000
Copper (million lbs) 6.1 7.0 – 7.5
Silver (oz) 114,260 130,000 – 150,000
Total Production
Gold (oz) 62,626 85,000 – 95,000
Copper (million lbs) 10.3 13.0 – 14.0
Silver (oz) 250,343 300,000 – 350,000
Total capital expenditures $15,514 $27,000 – $30,000
Cash operating costs (by-product) ($/oz) gold (1) $1,071 $1,050 – $1,150
All-in sustaining costs (by-product) ($/oz) gold (1) $1,330 $1,300 – $1,400
(1) FY2017 guidance assumptions for COC and AISC include by-p roduct 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
Q3 2017 Q2 2017 Q3 2016 YTD 2017 YTD 2016
Operating Performance
Gold
Production (oz) 26,414 20,513 16,038 62,626 50,943
Sales (oz) 24,287 20,773 16,496 58,997 47,111
Average realized price / oz $1,262 $1,238 $1,258 $1,253 $1,202
Copper
Production (‘000 lbs) 3,837 2,867 3,833 10,292 11,104
Sales (‘000 lbs) 4,244 3,032 3,879 10,836 10,071
Average realized price / lb $2.45 $2.50 $2.13 $2.42 $2.15
Silver
Production (oz) 75,578 66,485 112,507 250,343 403,345
Sales (oz) 77,173 87,441 111,949 290,240 373,327
Average realized price / oz $17.25 $17.42 $16.91 $17.30 $15.40
Financial Performance (in 000’s, except per share amounts)
Revenue $36,671 $31,714 $26,030 $91,843 $69,806
Mining costs $31,180 $26,272 $21,809 $81,808 $61,660
Gross margin ($1,909) $8 $406 ($8,754) ($4,284)
Net loss ($3,446) ($2,233) ($1,181) ($13,833) ($6,927)
Net loss per share (basic/diluted) ($0.03) ($0.02) ($0.01) ($0.10) ($0.05)
EBITDA (1) $4,782 $4,774 $2,509 $6,222 $3,457
Operating cash flows $7,769 $928 $2,176 $8,396 $3,216
Ending cash and cash equivalents $18,504 $14,210 $12,021 $18,504 $12,021
Capital expenditures (2) $3,294 $4,501 $3,122 $15,512 $9,583
Cash operating costs (by-product) ($/oz) gold (1) $1,032 $993 $1,035 $1,071 $1,045
All-in sustaining costs (by-product) ($/oz) gold (1)(2) $1,199 $1,214 $1,311 $1,330 $1,344
(1) Earnings before interest, taxes, deprecia tion and amortization (“EBITDA”), cash operating costs (“COC”) and all-in sustaining
costs (“AISC”) are non-IFRS performance measures.
(2) 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 t he applicable reporting period. The calculation of AISC include s
capex incurred (paid and unpaid) during the period.
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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).
For further information please contact:
Jeff Hillis
Chief Financial Officer
T (416) 369-6275
Cautionary Statements - Forward-Looking Information
Certain statements in this info rmation constitute forward-looking statemen ts 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, projec tions, objectives, assumptions, potentials, future events or
performance (often, but not always, 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” 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 potential to extend the mine life of El Valle and Don Mario beyond their current life-of-mine estimates including
specifically, but not limited to in the case of Don Mario, the completion of the major tailings storage facility expansion, the
mining of the Cerro Felix deposit, the pr ocessing of the mineral stockpiles and the reprocessing of the tailings material;
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 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 geographi c diversification; future financial performance, including the
ability to increase cash flow and profits; future financing requirements; and mine development plans.
Forward-looking statements are necessa rily based upon a number of estimates and assumptions that, while considered
reasonable by the Company as of the date of such statements, are inherently subject to si gnificant business, economic
and competitive uncertainties and conti ngencies. The estimates and assumptions of the Company contained or
incorporated by reference in this information, which may pr ove 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 fiscal 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 equipment or otherwise; permitting,
development, operations, expansion and acquisitions at El Va lle and Don Mario being consistent with the Company’s
current expectations; political developments in any jurisdict ion in which the Company operates being consistent with its
current expectations; certain price assumptions for gold, c opper 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; 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 beyon d the Company’s cont rol, affect the
operations, performance and results of the Company and its business, and coul d 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 pric e of gold, silver and cop per; the need to recalculate
estimates of resources based on actual production experience; t he 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 lic enses; the Company’s ability to use cyanide in its mining
operations; risks generally associated with mineral explor ation and development, including the Company’s ability to
continue to operate the El Valle and/or Don Mario and/or ability to resume l ong-term operations at Carlés Mine; the
Company’s ability to acquire and develop mineral properties and to successfully integr ate such acquisitions; the
Company’s ability to execute on its strategy; the Company’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 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
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the Company’s forward-looking statements and reference shou ld 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, estimates, projections, beliefs and opinions and,
except as required by law, the Comp any 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 informati on are intended to provide an overview of management’s
expectations with respect to certain future operating activi ties of the 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 M ining 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 hig her degree of uncertainty than mineral reserves as to their
existence as well as their economic and legal feasibility. Inferred mineral res ources, 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.