VANCOUVER, Aug. 6, 2019 /CNW/ - Filo Mining Corp.
(TSX-V:FIL)(Nasdaq First North:FIL) ("Filo Mining" or the
"Company") is pleased to announce its results for the three and six
months ended June 30, 2019.
View PDF version of news release.
HIGHLIGHTS
Filo Mining Validates Project's Vast Exploration
Potential, Confirms Significant Porphyry Mineralization at
Depth
During the 2018/2019 field campaign, which ended in April 2019, the Company successfully drilled
seven diamond core holes for a total of 4,747 metres, with a focus
on drill-testing the potential for a copper porphyry system below
the current resource.
Assay results were received between March and May 2019, and confirmed the Company's longtime
views that the current Mineral Resource estimate at Filo del Sol is
part of a much larger porphyry mineralization system. These
findings have the potential to be transformative for the Company,
as the copper-gold mineralization identified during the most recent
season's drill program extends to depths of 1,025 metres below
surface, which is 530 metres deeper than previously known. Assay
results from the 2018/2019 drill campaign are summarized in the
following table:
Hole-ID
|
From
(m)
|
To
(m)
|
Length
(m)
|
Cu
(%)
|
Au
(g/t)
|
Ag
(g/t)
|
FSDH025
|
0.0
|
1,025.0
|
1,025.0
|
0.30
|
0.22
|
1.6
|
incl.
|
334.0
|
466.0
|
132.0
|
0.48
|
0.30
|
1.2
|
FSDH026
|
0.0
|
613.9
|
613.9
|
0.39
|
0.34
|
1.6
|
incl.
|
14.0
|
474.0
|
460.0
|
0.45
|
0.34
|
1.6
|
and incl.
|
14.0
|
94.0
|
80.0
|
0.73
|
0.43
|
1.8
|
and incl.
|
228.0
|
316.0
|
88.0
|
0.50
|
0.33
|
1.4
|
and incl.
|
420.0
|
474.0
|
54.0
|
0.49
|
0.37
|
3.3
|
FSDH027
|
0.0
|
545.4
|
545.4
|
0.22
|
0.28
|
1.8
|
incl.
|
318.0
|
422.0
|
104.0
|
0.37
|
0.34
|
3.5
|
FSDH028
|
16.0
|
563.5
|
547.5
|
0.40
|
0.78
|
8.0
|
incl.
|
155.0
|
164.0
|
9.0
|
0.18
|
22.04
|
15.2
|
and incl.
|
390.0
|
563.5
|
173.5
|
0.55
|
0.54
|
12.9
|
incl.
|
496.0
|
563.5
|
67.5
|
0.61
|
0.68
|
24.0
|
FSDH029
|
0.0
|
800.1
|
800.1
|
0.24
|
0.26
|
1.8
|
incl.
|
6.0
|
42.0
|
36.0
|
0.78
|
0.20
|
3.1
|
FSDH030
|
134.0
|
512.0
|
378.0
|
0.44
|
0.89
|
42.5
|
incl.
|
190.0
|
244.0
|
54.0
|
1.05
|
0.83
|
1.4
|
and incl.
|
262.0
|
388.0
|
126.0
|
0.19
|
1.79
|
121.5
|
incl.
|
262.0
|
274.0
|
12.0
|
0.54
|
12.60
|
260.1
|
and incl.
|
388.0
|
512.0
|
124.0
|
0.49
|
0.40
|
2.6
|
FSDH031
|
212.0
|
216.0
|
4.0
|
0.08
|
3.18
|
10.5
|
Through the 2018/2019 field work, the Company has successfully
demonstrated the significant upside that still remains at the Filo
del Sol Project, and the positive potential impacts on size, scope
and project economics. Through exploration of less than 20% of the
Project's vast area, the Company has proven continuous
mineralization over a distance of 3 kilometres north-south, with
the deposit remaining open in both directions and at depth.
Remarking on this season's exploration success, Adam Lundin, President and CEO, commented, "We
seized the opportunity to conduct another field program at the Filo
del Sol Project, while the PFS was in its final stages, to gain a
better understanding of the extent of mineralization around our
current resource. What we confirmed through the 2018/2019 drill
program is not only that significant prophry mineralization exists
beneath the current deposit at Filo del Sol, but we have also
caught several high-grade pockets within it. To better understand
this mineralization, its geological constraints, and its
potentially significant impact on the project's size and scope, we
will be pursuing a more extensive, deep diamond drill program
during the 2019/2020 season, commencing this fall. We are looking
forward to another transformative season and continue to deliver
value to shareholders."
Identification of Water to Support Future Development of
Project
Also during the 2018/2019 field season, the Company completed a
hydrogeological drill program, which successfully identified
potential ground water sources to support the future development of
the Filo del Sol Project. Although further testing will be
required for production scale well development, the identification
of a water source is an important achievement and continues to
de-risk the project.
OUTLOOK
While the Filo del Sol Project represents a compelling
production case, as outlined in its pre-feasibility study,
effective January 13, 2019, with an
after-tax NPV of US$ 1.28 billion at
an 8% discount rate and an IRR of 23%, the exploration results
arising out of the 2018/2019 drill program, as described above,
highlight potentially transformative upside for the flagship
asset's size, scope and economic potential. Accordingly, for its
2019/2020 field campaign, the Company is currently planning to
further drill the copper-gold porphyry system underlying the
current Mineral Resource, which it believes will unlock value at
the project for its shareholders. The Company anticipates that this
2019/2020 drill program will commence around November or
December 2019, with the first set of
assay results available in early 2020.
Also during the 2019/2020 season, the Company plans to continue
ongoing environmental baseline studies and related data collection,
which will facilitate the undertaking of studies and permitting
applications with respect to the Filo del Sol Project in the
future.
The Company continues to review all financing options with
respect to the planned 2019/2020 field program.
FINANCIAL RESULTS
(In thousands of
Canadian dollars, except per share amounts)
|
|
|
Three months
ended
|
Six months
ended
|
|
|
June
30,
|
June
30,
|
|
|
2019
|
2018
|
2019
|
2018
|
Exploration and
project investigation
|
|
4,332
|
3,595
|
15,353
|
16,728
|
General and
administration ("G&A")
|
|
911
|
837
|
1,920
|
2,331
|
Net loss
|
|
5,336
|
4,446
|
17,428
|
18,835
|
Basic and diluted
loss per share
|
|
0.07
|
0.06
|
0.24
|
0.27
|
The financial
information in this table were selected from the Company's
condensed interim consolidated financial statements for the three
and six months ended June 30, 2019 (the "Financial Statements"),
which are available on SEDAR at
www.sedar.com and the Company's website
www.filo-mining.com.
|
SELECTED FINANCIAL INFORMATION
(In thousands of
Canadian dollars)
|
|
June
30,
|
December
31,
|
|
|
2019
|
|
2018
|
Cash
|
|
568
|
|
2,405
|
Working capital
deficit
|
|
(10,509)
|
|
(602)
|
Mineral
properties
|
|
7,726
|
|
7,118
|
Total
assets
|
|
11,568
|
|
11,938
|
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.
|
The Company incurred a net loss of $5.3
million during the three months ended June 30, 2019, comprised of $4.3 million and $0.9
million in exploration and project investigation costs and
G&A costs, respectively, compared to a net loss of $4.4 million for the three months ended
June 30, 2018. The variance is
primarily due to relative nature and levels of exploration activity
undertaken during the respective periods. Specifically, the larger
net loss incurred during the current period is due primarily to the
execution of a hydrogeological drill program during the three
months ended June 30, 2019, to
continue de-risking the project by identifying a source of
industrial water. During the 2018 comparative period, only ongoing
environmental baseline and data collection programs were being
conducted.
LIQUIDITY AND CAPITAL RESOURCES
As at June 30, 2019, the Company
had cash of $0.6 million and a net
working capital deficit of $10.5
million, which includes $11.1
million drawn and outstanding against credit facilities
extended by Zebra Holdings and Investments S.à.r.l. ("Zebra"), an
insider and related party of the Company by virtue of its
shareholding in the Company exceeding 20%, dated February 28, 2019 and April 26, 2019. As at June
30, 2019, the Company also had $6.5
million drawn and outstanding against a credit facility from
Zebra, dated January 12, 2019, which
matures on July 12, 2020. By
comparison, as at December 31, 2018,
the Company held cash of $2.4 million
and a net working capital deficit of $0.6
million, as at December 31,
2018.
About Filo Mining
Filo Mining is a Canadian exploration and development company
focused on advancing its 100% owned Filo del Sol copper-gold-silver
deposit located in Chile's Region
III and adjacent San Juan Province, Argentina. The Company's shares are listed on
the TSX-V and on Nasdaq First North under the symbol "FIL". Filo
Mining is a member of the Lundin Group of Companies.
Qualified Persons and Technical Notes
The 2018/2019 field program was carried out under the
supervision of Bob Carmichael,
B.A.Sc., P.Eng. Mr. Carmichael is Vice President, Exploration for
the Company and has reviewed and approved the technical information
contained in this news release. Samples were cut at Filo
Mining's Batidero camp near the project site by Company
personnel. Diamond drill core was sampled in 2 metre
intervals (except where shortened by geological contacts) using a
rock saw for sulphide mineralization. Oxide mineralization
was cut with a core splitter in order to prevent dissolution of
water soluble copper minerals during the wet sawing process.
Core diameter is a mix of PQ, HQ and NQ depending on the depth of
the drill hole. Samples were bagged and tagged at camp, and
packaged for shipment by truck to San Juan, Argentina.
Samples were delivered to the ALS preparation laboratory in
Mendoza, Argentina where they were
crushed and a 500g split was pulverized to 85% passing 200
mesh. The prepared samples were sent to the ALS assay
laboratory in Lima, Peru.
ALS is an accredited laboratory which is independent of the
Company. Gold analyses were by fire assay fusion with AAS
finish on a 30g sample. Copper and silver were analysed by
atomic absorption following a 4 acid digestion. Samples were
also analyzed for a suite of 36 elements with ICP-ES and a
sequential copper leach analysis was completed on each
sample. Copper and gold standards as well as blanks and
duplicates (field, preparation and analysis) were randomly inserted
into the sampling sequence for Quality Control. On average,
9% of the submitted samples are Quality Control samples. No
data quality problems were indicated by the QA/QC program.
Mineralized zones within the Filo del Sol deposit are
flat-lying, and drilled widths are interpreted to be greater than
90% of true widths. This includes the high-grade gold
intervals in holes FSDH028 and FSDH030.
Additional information
The technical information relating to the PFS is based on a
technical report titled "NI 43-101 Technical Report,
Pre-feasibility Study for the Filo del Sol Project" dated
February 22, 2019, with an effective
date of January 13, 2019 (the
"Technical Report"). The Technical Report was prepared for Filo
Mining by Ausenco Engineering Canada Inc. ("Ausenco"). The
Qualified Persons, as defined under NI 43-101, responsible for the
Technical Report are Scott Elfen, P.E., Ausenco, Robin Kalanchey, P.Eng., Ausenco, Bruno Borntraeger, P.Eng., Knight Piesold Ltd.,
Fionnuala Devine, P.Geo., Merlin
Geosciences Inc., Ian Stillwell, BGC
Engineering Inc., Neil Winkelmann,
FAusIMM, SRK Consulting (Canada)
Inc., James N. Gray, P.Geo.,
Advantage Geoservices Limited, and Jay
Melnyk, P.Eng., AGP Mining Consultants, 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 six months ended June 30, 2019 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 August 6, 2019 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
reserve and 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 PFS for the
Filo del Sol project, the assumptions used in the mineral reserves
and 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 potential
copper-gold porphyry system underlying the current Filo del Sol
deposit and the undertaking of and timing for an exploration drill
program to test the system, including the expected timing of
results related thereto; the ability of the Company to satisfy the
conditions of the Company's existing credit facilities, including
repayment upon their maturity; the ability of the Company 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
reserves or 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 reserves and resources,
estimations of 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.