VANCOUVER, Nov. 9, 2018 /CNW/ - Filo Mining Corp.
(TSX-V: FIL)(Nasdaq First North: FIL) ("Filo Mining" or the
"Company") is pleased to announce its results for three and nine
months ended September 30, 2018.
Please view PDF version of News Release.
HIGHLIGHTS
During the third quarter of 2018, the Company completed an
update to the Mineral Resource estimate at the Filo del Sol Project
(the "Project"), with an effective date of June 11, 2018. The updated Mineral Resource
estimate is highlighted by the successful conversion of previously
Inferred material to the Indicated category, resulting in an
overall increase in the tonnage of the Indicated category by 14%,
to 425.1 million tonnes. In addition, the contained metals within
the Indicated category have also increased as follows:
- The total Indicated contained gold in all zones increased by
12% to 4.4 million ounces;
- The total Indicated contained copper in all zones increased by
12% to 3.1 billion pounds; and
- The total Indicated contained silver in all zones increased by
34% to 147 million ounces.
The increases in the tonnage and contained metals within the
Mineral Resource estimate's Indicated category mark the successful
achievement of a key objective of the Company's recent 2017/2018
field program, which was to successfully convert material
previously categorized as Inferred to Indicated, so as to maximize
the amount of material available for inclusion in the Preliminary
Feasibility Study ("PFS"), as appropriate.
Consistent with the previous Mineral Resource estimate, the
updated Mineral Resource estimate is comprised of four distinct
mineral zones: an uppermost gold oxide ("AuOx") zone, a copper-gold
oxide ("CuAuOx") zone, and a silver zone, all of which is underlain
by a copper-gold sulphide ("Sulphide") zone. The updated Mineral
Resource estimate, segregated by zone, is summarized in the
following table.
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Zone
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Cutoff
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Category
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Tonnes
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Cu
|
Au
|
Ag
|
lbs Cu
|
Ounces Au
|
Ounces Ag
|
(millions)
|
(%)
|
(g/t)
|
(g/t)
|
(millions)
|
(thousands)
|
(thousands)
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AuOx
|
0.20 g/t
Au
|
Indicated
|
49.9
|
0.04
|
0.42
|
3.0
|
45
|
679
|
4,810
|
Inferred
|
20.8
|
0.08
|
0.34
|
2.4
|
35
|
226
|
1,580
|
CuAuOx
|
0.15 %
CuEq
|
Indicated
|
259.2
|
0.38
|
0.29
|
2.7
|
2,166
|
2,385
|
22,500
|
Inferred
|
74.3
|
0.29
|
0.31
|
2.1
|
481
|
735
|
5,040
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Ag
|
20 g/t Ag
|
Indicated
|
40.5
|
0.50
|
0.43
|
87.6
|
446
|
562
|
114,180
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Inferred
|
8.8
|
0.36
|
0.43
|
79.3
|
70
|
121
|
22,400
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Sulphide
|
0.30 %
CuEq
|
Indicated
|
75.5
|
0.27
|
0.34
|
2.2
|
451
|
813
|
5,370
|
Inferred
|
71.2
|
0.30
|
0.33
|
2.5
|
470
|
750
|
5,740
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Total
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Indicated
Inferred
|
425.1
|
0.33
|
0.32
|
10.7
|
3,108
|
4,439
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146,860
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175.1
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0.27
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0.33
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6.2
|
1,056
|
1,832
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34,760
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1 -
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CuAuOx copper
equivalent (CuEq) assumes metallurgical recoveries of 82% for
copper, 55% for gold and 71% for silver based on preliminary
metallurgical testwork, and metal prices of US$3/lb copper,
US$1300/oz gold, US$20/oz silver. The CuEq formula is:
CuEq=Cu+Ag*0.0084+Au*0.4239;
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2 -
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Sulphide copper
equivalent (CuEq) assumes metallurgical recoveries of 84% for
copper, 70% for gold and 77% for silver based on similar deposits,
as no metallurgical testwork has been done the Sulphide
mineralization, and metal prices of US$3/lb copper, US$1300/oz
gold, US$20/oz silver. The CuEq formula is:
CuEq=Cu+Ag*0.0089+Au*0.5266;
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3 -
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The Qualified Person
for the resource estimate is James N. Gray, P.Geo. of Advantage
Geoservices Ltd.;
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4 -
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All figures are
rounded to reflect the relative accuracy of the
estimate;
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5 -
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Mineral Resources are
not Mineral Reserves and do not have demonstrated economic
viability;
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6 -
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The resource was
constrained by a Whittle® pit shell using the following
parameters: Cu $3/lb, Ag $20/oz, Au $1300/oz, slope of 45°, a
mining cost of $2.50/t and an average process cost of
$13.26/t.
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The updated Mineral Resource estimate is now being incorporated
into the PFS, which continues to be targeted for completion by the
first quarter of 2019. Metallurgical testwork results will be the
next integral input to the PFS, and this phase of testing is now
nearing completion.
Commenting on the Company's current status, Adam Lundin, President and CEO, noted, "We are
now close to the completion of the PFS for our Filo del Sol
Project, which is still expected by Q1 2019. I am confident that
the results will confirm that we have a robust standalone project
that will deliver strong value to our shareholders. At the same
time, the current resource of the Project, which forms the basis of
the PFS, is based upon drilling less than 20% of the Project area.
As such, in tandem with the completion of the PFS and moving
forward the current Project, we will shortly commence the 2018/2019
field program where we will dedicate drill metres to test the
prospectivity of a potential copper porphyry system below our
current resource. The upside to the Project is significant and
based upon industry analogues we are excited about the potential of
the area."
OUTLOOK
The Company continues to work towards completion of the PFS,
which is being led by Ausenco Engineering Canada Inc. and is
targeted for completion by the first quarter of 2019. The PFS will
incorporate the updated Mineral Resource estimate and will explore
several opportunities to enhance the value of the Filo del Sol
Project, as identified in the PEA, including:
- Evaluating opportunities to optimize the mine plan and
production schedules by smoothing out the production profile and
bringing forward copper revenues; and
- Increasing metallurgical recoveries with further test work and
optimization.
The refinement of metallurgical recoveries, which is deemed a
key area of focus and value creation for the Filo del Sol Project,
began in April 2018, using material
collected during the 2017/2018 field program. This current phase of
metallurgical testwork is now nearing completion and results will
be incorporated into the PFS.
With the completion of an updated Mineral Resource estimate and
the metallurgical testwork program progressing as scheduled, the
PFS is on target for completion by the first quarter of 2019, which
will be the next landmark for the Company's continuing advancement
of the Filo del Sol Project. In advance of receiving the PFS
results, which will guide the necessary steps to undertaking a
feasibility study on the project, the Company has planned its
2018/2019 field program around certain known or anticipated
informational requirements for feasibility-level studies, such as
the need to conduct hydrogeological testwork to confirm a source of
water for the project. Data generated through this advance work
should facilitate the eventual undertaking of a feasibility study
in the future. In addition, to maximize utilization of the field
camp and personnel during the season, the 2018/2019 field program
also plans to test the project's significant exploration upside. As
mentioned, to date, only approximately 20% of the project area has
been explored, the current resource remains open for expansion, and
there is potential for a copper porphyry system below the current
resource. Preparations for this upcoming field program are
currently underway, and results are expected to be available in the
first and second quarters of 2019.
FINANCIAL RESULTS
(In thousands of
Canadian dollars, except per share amounts)
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Three months
ended
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Nine months
ended
|
|
|
September
30,
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September
30,
|
|
|
2018
|
2017
|
2018
|
2017
|
Exploration and
project investigation
|
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2,208
|
1,227
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18,935
|
11,414
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General and
administration ("G&A")
|
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1,608
|
1,311
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3,939
|
2,731
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Net loss
|
|
3,865
|
2,549
|
22,699
|
14,115
|
Basic and diluted
loss per share
|
|
0.05
|
0.04
|
0.32
|
0.23
|
The financial
information in this table were selected from the Company's
condensed interim consolidated financial statements for the three
and nine months ended September 30, 2018 (the "Financial
Statements"), which are available on SEDAR at
www.sedar.com and the Company's website
www.filo-mining.com.
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SELECTED FINANCIAL INFORMATION
(In thousands of
Canadian dollars)
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|
September
30,
|
December
31,
|
|
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2018
|
|
2017
|
Cash
|
|
3,257
|
|
2,417
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Working
capital
|
|
4,854
|
|
1,462
|
Mineral
properties
|
|
6,993
|
|
6,479
|
Total
assets
|
|
13,009
|
|
10,193
|
The financial
information in this table were selected from the Financial
Statements, which are available on SEDAR at
www.sedar.com and the Company's website
www.filo-mining.com.
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The Company incurred a net loss of $3.9
million during the current quarter, comprised of
$2.2 million and $1.6 million in exploration and project
investigation costs and G&A costs, respectively, compared to a
net loss of $2.5 million for the
three months ended September 30,
2017. The variance is primarily due to relative levels of
exploration activity undertaken during the respective periods.
Specifically, the larger net loss incurred during the three months
ended September 30, 2018 is due to
the higher costs associated with the undertaking of a PFS study on
the Filo del Sol Project during the period, which is a more
advanced, detailed and costly study as compared to the preliminary
economic assessment that was in progress during the 2017
comparative period.
LIQUIDITY AND CAPITAL RESOURCES
As at September 30, 2018, the
Company had cash of $3.3 million and
net working capital of $4.9 million,
compared to cash of $2.4 million and
net working capital of $1.5 million,
as at December 31, 2017. The increase
in the Company's cash and net working capital is due primarily to
aggregate net proceeds totaling $24.4
million received from the Financings, which closed on
February 28, 2018. As at September 30, 2018, this cash inflow has been
largely partially offset by funds directed towards advancing the
Filo del Sol Project, and to a lesser extent, $0.5 million in relation to the annual option
payment made for the Tamberias property in June 2018, funds spent for general corporate
purposes, and repayment of a short-term credit facility used by the
Company prior to closing of the Financings, as announced by the
Company on January 12, 2018.
Moving forward, the Company expects that the majority of its
treasury will be used to complete the PFS, which is currently
underway, and to fund ongoing work programs to advance the Filo del
Sol Project.
Based on Filo Mining's financial position at September 30, 2018, the Company anticipates the
need for further funding to support a planned field program at its
South American operations. The Company is currently evaluating
potential additional sources of financing for its field program and
operations. Historically, capital requirements have been primarily
funded through equity financing, joint ventures, disposition of
mineral properties and investments, and the use of short-term
credit facilities. Management is confident that additional sources
of funding will be secured to fund planned expenditures for at
least twelve months from September 30,
2018.
About Filo Mining
Filo Mining is a Canadian mineral exploration company which
holds a 100% interest in the Filo del Sol Project on the border of
Argentina's San Juan Province and
Chile's adjacent Region III. Filo
del Sol is located between the prolific Maricunga and El Indio Gold
Belts, two major mineralized trends that contain such deposits as
Caspiche, La Coipa, Veladero, and El Indio. The region is
mining-friendly and hosts a number of large-scale mining
operations. The project area is covered under the Mining
Integration and Complementation Treaty between Chile and Argentina, which provides the framework for
the development of cross border mining projects. Built on a
foundation of experienced management and focused on advancing
exploration projects in Chile and
Argentina, Filo Mining is well
positioned to build shareholder value through discovery and
resource development.
Qualified Person
The scientific and technical disclosure for the Filo del Sol
Project included in this news release have been reviewed and
approved by Bob Carmichael, P. Eng.
(BC) and/or James Beck, B.A.Sc.,
P.Eng. Mr. Carmichael is Filo Mining's Vice-President of
Exploration and a Qualified Person under National Instrument 43-101
Standards of Disclosure for Mineral Projects ("NI43-101").
Mr. Beck is Filo Mining's Vice-President of Corporate Development
and Projects and is also a Qualified Person under NI43-101.
Additional information
The technical information relating to the PEA is based on a
Technical Report for a Preliminary Economic Assessment on the Filo
del Sol Project, Region III, Chile
and San Juan Province, Argentina
dated December 18, 2017, with an
effective date of November 6, 2017
(the "Technical Report"), which was prepared for Filo Mining by SRK
Consulting (Canada) Inc ("SRK").
The Qualified Persons, as defined under NI 43-101, responsible for
the Technical Report are Fionnuala
Devine, P. Geo., Merlin Geosciences Inc., Carl E. Defilippi, RM SME, Kappes, Cassiday
& Associates, Giovanni Di
Prisco, PhD., P.Geo., Terra Mineralogical Services Inc.,
James N. Gray, P. Geo., Advantage
Geoservices Limited, Robert
McCarthy, P. Eng., SRK, Cameron
Scott, P. Eng., SRK, and Neil
Winkelmann, FAusIMM, SRK, all of whom are independent of
Filo Mining. The Technical Report is available for review under the
Company's profile on SEDAR at www.sedar.com and on the Company's
website at www.filo-mining.com.
The Company's condensed interim consolidated financial
statements for the three and nine months ended September 30, 2018 and related management's
discussion and analysis are available on the Company's website at
www.filo-mining.com or under its profile on SEDAR at
www.sedar.com.
Filo Mining is listed on the TSX-V and Nasdaq First North
Exchange under the trading symbol "FIL". Pareto Securities AB is
the Company's Certified Adviser on Nasdaq First North.
This information was submitted by Filo Mining Corp. for
publication, through the agency of the contact person set out
below, on November 9, 2018 at
6:00 pm Pacific time.
On behalf of the board of directors of Filo Mining,
Adam Lundin, President and
CEO
Filo Mining Corp.
Cautionary Note Regarding Forward-Looking Statements
Certain statements made and information contained herein in this
press release constitutes "forward-looking information" and
forward-looking statements" within the meaning of applicable
securities legislation (collectively, "forward-looking
information") concerning the business, operations, financial
performance and condition of Filo Mining. The forward-looking
information contained in this press release is based on information
available to the Company as of the date of this press release.
Except as required under applicable securities legislation, the
Company does not intend, and does not assume any obligation, to
update this forward-looking information. Generally, any
statements that express or involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions or future events or performance, (often, but not
always, identified by words or phrases such as "plans", "expects"
or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "projects" , "estimates",
"budgets", "scheduled", "forecasts", "assumes", "intends",
"strategy", "goals", "objectives", "potential", "possible",
"anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or statements that certain
actions, events, conditions or results "will", "may", "could",
"would", "should", "might" or "will be taken", "will occur" or
"will be achieved" or the negative connotations thereof and similar
expressions) are not statements of historical fact and may be
forward-looking statements.
All statements other than statements of historical fact may be
forward-looking statements. Forward-looking information is
necessarily based on estimates and assumptions that are inherently
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance
or achievements of the Company to be materially different from
those expressed or implied by such forward-looking information,
including but not limited to: risks and uncertainties relating to,
among other things, the inherent uncertainties regarding mineral
resource estimates, cost estimates, changes in commodity prices,
currency fluctuation, financings, unanticipated resource grades,
infrastructure, results of exploration activities, cost overruns,
availability of materials and equipment, timeliness of government
approvals, taxation, political risk and related economic risk and
unanticipated environmental impact on operations as well as other
risks, and uncertainties and other factors, including, without
limitation, those referred to in the "Risks and Uncertainties"
section of the Company's most recent MD&A and/or Annual
Information Form, under the heading "Risks Factors", and elsewhere,
which may cause the actual results, level of activity, performance
or achievements of the Company to be materially different from
those expressed or implied by such forward-looking information.
The Company believes that the expectations reflected in the
forward-looking information included in this press release are
reasonable but no assurance can be given that these expectations
will prove to be correct and such forward-looking information
should not be unduly relied upon. Information contained in
this press release is as of the date of this press release.
In particular, this press release contains forward-looking
information pertaining to the assumptions used in the PEA for the
Filo del Sol project, the assumptions used in the mineral resources
estimates for the Filo del Sol project, including, but not limited
to, geological interpretation, grades, metal price assumptions,
metallurgical and mining recovery rates, geotechnical and
hydrogeological conditions, as applicable; ability to develop
infrastructure; assumptions made in the interpretation of drill
results, geology, grade and continuity of mineral deposits;
expectations regarding access and demand for equipment, skilled
labour and services needed for exploration and development of
mineral properties; and that activities will not be adversely
disrupted or impeded by exploration, development, operating,
regulatory, political, community, economic and/or environmental
risks. In addition, this press release contains
forward-looking information pertaining to the undertaking of
and timing for the completion of a Pre-Feasibility Study;
expected timing for the results of metallurgical testwork; ability
to secure additional financing and/or the quantum and terms
thereof; exploration and development plans and expenditures; the
timing and nature of studies and any potential development
scenarios; opportunities to improve project economics; the success
of future exploration activities; potential for resource expansion;
potential for the discovery of new mineral deposits; ability to
build shareholder value; expectations with regard to adding to
mineral resources through exploration; expectations with respect to
the conversion of inferred resources to an indicated resources
classification; ability to execute planned work programs;
estimation of commodity prices, mineral resources, costs, and
permitting time lines; ability to obtain surface rights and
property interests; currency exchange rate fluctuations;
requirements for additional capital; government regulation of
mining activities; environmental risks; unanticipated reclamation
expenses; title disputes or claims; limitations on insurance
coverage; and other risks and uncertainties.
Forward-looking information is based on certain assumptions that
the Company believes are reasonable, including that the current
price of and demand for commodities will be sustained or will
improve, the supply of commodities will remain stable, that the
general business and economic conditions will not change in a
material adverse manner, that financing will be available if and
when needed on reasonable terms and that the Company will not
experience any material labour dispute, accident, or failure of
plant or equipment. These factors are not, and should not be
construed as being, exhaustive. Although the Company has
attempted to identify important factors that would cause actual
results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated, or intended.
There can be no assurance that such statements will prove to be
accurate, as the Company's actual results and future events could
differ materially from those anticipated in such statements, as a
result of the factors discussed in the "Risk and Uncertainties"
section of the Company's most recent management's discussion and
analysis and elsewhere and in the "Risk Factors" section in the
Company's most recent Annual Information Form, which are available
under the Company's profile on SEDAR at www.sedar.com. All of
the forward-looking information contained in this document is
qualified by these cautionary statements. Readers are
cautioned not to place undue reliance on forward-looking
information due to the inherent uncertainty thereof.
Statements relating to "mineral resources" are deemed to be
forward looking information, as they involve the implied
assessment, based on certain estimates and assumptions, that the
mineral resources described can be profitably produced in the
future.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release
SOURCE Filo Mining Corp.