Orvana Reports Q1 2019 Financial Results; Consistent Performance IN LINE with Guidance; Efforts to Improve Unit Costs Underway
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Date: February 12, 2019 #03-2019
ORVANA REPORTS Q1 2019 FINANCIAL RESULTS; CONSISTENT PERFORMANCE
IN LINE WITH GUIDANCE; EFFORTS TO IMPROVE UNIT COSTS UNDERWAY
All Amounts in US Dollars Unless Otherwise Stated
First Quarter of Fiscal 2019 Highlights:
Quarterly gold production of 27,272 ounces and copper production of 1.4 million pounds;
Consolidated COC and AISC of $1,025 and $1,161, respectively;
EBITDA of $4.4 million;
Revenue of $36.3 million; and
Cash balance of $8.3 million as of December 31, 2018.
TORONTO, ONTARIO, February 12, 2019 – Orvana Minerals Corp. (TS X:ORV) (the “Company” or
“Orvana”) announced today financial and operational results for the first quarter of fiscal 2019 (“Q1 2019”).
The Company is also providing financial and operational updates for its El Valle and Carlés Mines (collectively,
“El Valle”) operations in northern Spain, and for its Don Mario Mine operations in Bolivia.
The audited consolidated financial statements for Fiscal 2018 ( “2018 Financials”) and Management’s
Discussion and Analysis related thereto (“2018 MD&A”) are available on SEDAR and on the Company’s website
at www.orvana.com.
The Company is pleased to report the following positive developments in Q1 2019:
El Valle – Consistent performance:
El Valle delivered 7% higher gold production (16,546 oz) in the first quarter of fiscal 2019 compared to the
fourth quarter of fiscal 2018 (15,490 oz), due to 6% grade incr ease. The ratio of oxides ore processed in
the mill was at the level of 41% and mechanical advance rates i n oxides areas reached 1,906 meters in
the first quarter of fiscal 2019.
Don Mario – Life of mine extension underway:
Don Mario delivered 19% lower gold production (10,726 oz) in the first quarter of fiscal 2019 compared to
the fourth quarter of fiscal 2018, due to a lower head-grade area mined, according to plan and is on track
to meet fiscal 2019 guidance. Fis cal 2019 ore will continue to be sourced from the Cerro Felix pit and
processed at a high recovery rate achieved by the re-commissioned CIL circuit.
The Company is fully committed with the life of mine extension:
Next focus for life of mine ex tension is processing the existing oxides stockpile. This undertaking
will require the implementation of a SART circuit, subject to t he completion of technical reviews
supportive of the project and securing the required financing. The SART circuit, together with the
existing flotation and CIL-CIC ci rcuits, best positions Don Mar io for a longer mine life based on
processing flexibility.
Brownfield and greenfield exploration continues around Don Mar io and Cerro Felix mines, in the
Cristal schist belt and in Eastern schist belt.
An evaluation of re-processing tailings is in progress to dete rmine the viability of recovering gold
from material deposited in the ta ilings impoundment since the c ommencement of production at
Don Mario.
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Longer term financing structure:
As previously disclosed, in the first quarter of fiscal 2019, t he Company obtained approval from three
Spanish financial institutions t o a syndicated credit facility. Subsequent to December 31, 2018, the
Company, through its wholly-owned subsidiary OroValle, closed the facility for a total amount of €6 million.
The facility term (four years) is aligned with Orovalle’s operational strategy.
Concurrent with the closing, Orvana repaid in full the Samsung C&T Prepayment Facility, originally entered
into in August 2016.
Juan Gavidia, CEO of Orvana Minerals stated: “I am very satisfied that both operations have reached a level of
operational outcomes that achieves quarterly targets, whil e keeping safety and en vironmental sustainability
first. Operational stability is now allowing us to focus on building shareholder value through unit costs reduction
and life of mine extensions.”
Selected Operational and Financial Information
Q1 2019 Q4 2018 Q1 2018 FY 2018
Operating Performance
Gold
G r a d e ( g / t ) 2.54 2.72 2.57 2.61
Recovery (%) 93.7 92.3 89.8 91.7
Production (oz) 27,272 28,661 23,172 103,384
Sales (oz) 27,466 28,044 21,995 102,018
Average realized price / oz $1,226 $1,208 $1,269 $1,273
Copper
G r a d e ( % ) 0.48 0.51 0.64 0.60
Recovery (%) 75.9 81.6 63.1 65.9
Production (‘000 lbs) 1,375 1,291 2,759 8,233
Sales (‘000 lbs) 1,400 1,231 2,700 8,687
Average realized price / lb $2.81 $2.81 $2.82 $2.89
Financial Performance (in 000’s, except per share amounts)
Revenue $36,318 $36,298 $34,170 $145,836
Mining costs $30,595 $30,632 $28,060 $120,946
Gross margin $865 $3,019 $458 $3,156
Net loss ($1,060) ($1,231) ($3,379) ($11,097)
Net loss per share (basic/diluted) ($0.01) ($0.01) ($0.02) ($0.08)
EBITDA (1)
$4,449 $1,165 $4,182 $13,750
Operating cash flows before non-cash working
capital changes $4,169 $3,049 $2,086 $11,864
Operating cash flows $3,366 $1,129 $2,147 $1,800
Ending cash and cash equivalents $8,325 $11,634 $20,617 $11,634
Capital expenditures (2) $1,763 $3,051 $6,207 $20,338
Cash operating costs (by-product) ($/oz) gold (1) $1,025 $1,003 $999 $1,021
All-in sustaining costs (by-product) ($/oz) gold (1)(2) $1,161 $1,187 $1,253 $1,259
(1) Earnings before interest, taxes, depreciation and amortization (“EBITDA”), cash operating costs and all-in sustaining costs ar e
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 the applicable reporting period. The calculation of AISC includ es
capex incurred (paid and unpaid) during the period.
About Orvana Minerals Orvana is a multi-mine gold-copper-silver company. Orvana’s operating assets consist
of the producing El Valle and Carlés gold-copper-silver mines i n northern Spain and the producing Don Mario
gold-silver operations in Bolivia. Additional information is available at Orvana’s website (www.orvana.com).
For further information please contact:
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Nuria Menéndez
Chief Financial Officer
Joanne Jobin
Investor Relations Officer
T: 647 964 0292
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 always, using words or phrases
such as “believes”, “expects”, “plans”, “estimates” or “intends” or stating that certain actions, events or results “may”, “cou ld”, “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 curr ent life-of-mine estimates including specifically, but not limited to in the
case of Don Mario, the mining of the Cerro Felix deposit, the processing of the mineral stockpiles (including the implementatio n of the
SART circuit) and the reprocessing of the ta ilings material; Orvana’s ability to optim ize its assets to deliver shareholder val ue; the
Company’s ability to optimize productivity at Don Mario and El Valle; estimates of future production, operating costs and capit al
expenditures; mineral resource and reserve estimates; statem ents 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 performance,
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
Company as of the date of such statements, are inherently subj ect to significant business, ec onomic and competitive uncertainti es and
contingencies. The estimates and assumptions of the Company contai ned or incorporated by reference in this information, which m ay
prove to be incorrect, include, but are not limited to, the variou s 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 ex pressly incorporated herein by reference as well as: there being no significant disrup tions
affecting operations, whether due to labour disruptions, supply disruptions, power disr uptions, damage to equipment or otherwis e;
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 oper ates being consistent wi th its current expect ations;
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;
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 control, 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 an ticipated
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 es timates of resources based on ac tual 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 generally associated with mineral expl oration and development, including the Company’s ability to cont inue to
operate the El Valle and/or Don Mario and/or ability to resume long-term operations at the Carlés Mine; the Company’s ability to successfully
implement the SART circuit to process the current oxides sto ckpiles 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 Company’s ability to obtain
financing when required on terms that are acceptable to the Comp any; challenges to the Company’s interests in its property and mineral
rights; current, pending and proposed legislat ive or regulatory developments or changes in political, social or economic condit ions in the
countries in which the Company operates; general economic conditions worldwide; 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 in this information with respect to the anticipated develop ment and exploration of the Comp any’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 stateme nts.
The forward-looking statements made in this information are intended to provide an ov erview of management’s expectations with respect
to certain future operating activities of the Company and may not be appropriate for other purposes.