Pasinex Announces Third Quarter 2020 Financial Results
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Pasinex Announces Third Quarter 2020 Financial Results
TORONTO, ON – November 30, 2020 – Pasinex Resources Limited (CSE: PSE) (FSE: PNX)
(The “Company” or “Pasinex”) today reports the Company’s financial and operating results for the
three and nine months ended September 30, 2020.
Andrew Gottwald, Chief Financial Officer of Pasinex, commented, “There were positive
developments during the quarter at the Company’s Turkish joint venture including management
changes, the beginning of the development of a fourth adit and the addition of the Mahyalar claim.
We are also very pleased to have been able to negotiate an extension on the highly prospective
Gunman project option. 2020 has proved to be a challenging year, but the Company is now
positioned to drive both of these interests forward in 2021.”
Highlights – Third Quarter 2020
(1) Refer to Note 1
Financial and Operational
For the three and nine months ended September 30, 2020, Pasinex incurred a net loss of
approximately $0.4 million and $1.1 million, respectively, compared with a net loss of
approximately $0.25 million and $0.57 million for the three and nine months ended September
30, 2019. The primary difference in the increase in net loss is a result of having received smaller
dividends from Horzum AS during 2020. The decrease in dividends received is partially offset by
a reduction in general and administrative costs period over period.
2020 2019 2020 2019
Financial:
Equity gain from Horzum AS -$ 135,701$ 3,298$ 672,139$
Adjusted equity gain from Horzum AS (1)
101,173$ 1,688,233$ 246,951$ 1,462,956$
Dividend received from investment in Horzum AS -$ 135,701$ 3,298$ 672,139$
Consolidated net loss (408,615) $ (245,251) $ (1,101,021) $ (568,710) $
Adjusted consolidated net income (loss) (1)
(330,985) $ 1,307,281$ (813,328) $ 222,107$
Basic and diluted net loss per share (0.01) $ 0.00$ (0.01) $ 0.00$
Cash used in operating activities 317,088$ 92,936$ 711,308$ 174,241$
Weighted average shares outstanding 144,554,371 144,395,674 144,554,371 144,368,289
2020 2019 2020 2019
Horzum AS operational data (100% basis):
Zinc product mined (wet) tonnes 3,050 3,216 9,697 14,296
Zinc product sold (wet) tonnes 2,731 1,502 8,376 11,558
Zinc product sold grade 30% 44% 30% 37%
Gross margin (1)
23% 73% 16% 64%
CAD cost per tonne mined (1)
322$ 398$ 310$ 306$
USD cash cost per pound of zinc mined (1)
0.38$ 0.38$ 0.36$ 0.30$
Three Months Ended
September 30
Nine Months Ended
September 30
Three Months Ended
September 30
Nine Months Ended
September 30
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The adjusted consolidated net loss (see non-GAAP measures) was approximately $0.3 million
and $0.8 million for the three and nine months ended September 30, 2020, compared with
adjusted consolidated net income of $1.3 million and $0.2 million for the same periods in 2019.
The adjusted equity gain (see non-GAAP measures) was approximately $0.1 million and $0.25
million for the three and nine months ended September 30, 2020, compared with approximately
$1.7 million and $1.5 million for the three and nine months ended September 30, 2019. These
non-GAAP measures reflect what the results of the Company would be without the recording of
the impairment charges in 2019 and 2020.
The operating income in Horzum AS decreased substantially from approximately $4.6 million in
the nine months ended September 30, 2019, to $0.8 million in the same period in 2020. This
decrease in operating income is a result of fewer tonnes having been sold, lower zinc product
prices having been realized on sales along with higher per tonne costs of sales in 2020. These
factors also resulted in the gross margin (see non-GAAP measures) for the nine months ended
September 30, 2020, decreasing to 16% from 64% for the same period in 2019.
During the quarter, Horzum AS began developing a new fourth adit to access zinc sulphide
product, which is expected to contain a grade of between 50% to 60%. By the end of September
2020, approximately 130 metres of the fourth adit had been completed.
During the quarter, Horzum AS received an exploration license for the Mahyalar claim, an area
located to the east of the Pinargozu mine in the Mahyalar district of Kozan. The claim area is
approximately 18 km 2 in size and is located in the Pasali Fault zone. The exploration license is
valid for seven years. Fieldwork conducted to date has shown elevated zinc levels from rock and
soil samples. Exploration, including the collection of further rock, soil samples and geological
mapping, will be conducted over the next year.
Subsequent to the quarter end, the Company entered into an amending agreement with Cypress
and Caliber to extend the deadline for the completion of the minimum exploration expenditures to
December 31, 2022. In addition, the deadline to acquire the additional 29% interest has been
extended to December 31, 2024.
In 2020, the Company received $805,500 from related parties of the Company. Subsequent to
the end of the quarter, the Company received an additional $50,000 from those related parties.
Summary of Pasinex Situation in Turkey
Management has continued its contact with senior executives of the Kurmel Group during 2020.
During the quarter, the joint venture underwent certain management changes resulting from these
continued discussions. Those management changes include the appointment of Pasinex AS
employees in the roles of acting Managing Director of Horzum AS and acting Exploration Manager
of Horzum AS. Pasinex continues to work toward resolving the financial issues and debts owed
by Horzum AS.
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Note 1
Please note that all dollar amounts in this news release are expressed in Canadian dollars unless
otherwise indicated. Refer also to the first quarter 2020 Management’s Discussion and Analysis
(MD&A) and Audited Financial Statements found on SEDAR.com for more information. This news
release includes non-GAAP measures, including adjusted equity gain from Horzum AS, adjusted
consolidated net income, gross margin, cost per tonne mined and US$ cash cost per pound of
zinc mined. A reconciliation of these non-GAAP measures to the GAAP financial statements is
included in the MD&A.
About Pasinex
Pasinex Resources Limited is a Toronto-based mining company that owns 50% of the producing
Pinargozu high-grade zinc mine and, under a Direct Shipping Program, sells to zinc
smelters/refiners from its mine site in Turkey. The Company also holds an option to acquire 80%
of the Spur high-grade zinc exploration project in Nevada. Pasinex has a strong technical
management team with many years of mineral exploration and mining project development
experience. The mission of Pasinex is to build a mid-tier zinc company based on its mining and
exploration projects in Turkey and Nevada.
Visit our web site at www.pasinex.com.
On Behalf of the Board of Directors
PASINEX RESOURCES LIMITED
“Andrew Gottwald”
Andrew Gottwald Evan White
Chief Financial Officer Manager of Corporate Communications
Phone: +1 416.861.9659 Phone: +1 416.906.3498
Email: [email protected] Email: [email protected]
The CSE does not accept responsibility for the adequacy or accuracy of this news release.
This news release includes forward-looking statements that are subject to risks and uncertainties. Forward-
looking statements involve known and unknown risks, uncertainties, and other factors that could cause the
actual results of the Company to be materially different from the historical results or any future results
expressed or implied by such forward-looking statements.
All statements within, other than statements of historical fact, are to be considered forward-looking.
Although Pasinex believes the expectations expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not a guarantee of future performance, and actual results or
developments may differ materially from those in forward-looking statements. Factors that could cause
actual results to differ materially from those in forward-looking statements include market prices, continued
availability of capital and financing, exploration results, and general economic, market or business
conditions. There can be no assurances that such statements will prove accurate and, therefore, readers
are advised to rely on their own evaluation of such uncertainties. We do not assume any obligation to
update any forward-looking statements.